UAE incumbent Etisalat announced it has abandoned discussions to acquire a 46% stake in Kuwait’s Zain Group for US$12bn from a consortium led by the Kharafi Group.
In a release it said: “In light of the results of the extensive due diligence performed…
UAE incumbent Etisalat announced it has abandoned discussions to acquire a 46% stake in Kuwait’s Zain Group for US$12bn from a consortium led by the Kharafi Group.
In a release it said: “In light of the results of the extensive due diligence performed by Etisalat and its financial, legal and technical advisors, the current political unrest in the region, non unanimous agreement among Zain Board of Directors(shareholders) and the impact of the upcoming mandatory offer rules in Kuwait, the terms of its conditional binding offer as announced on November 3, 2010 are no longer viable.”
Under Kuwait’s new capital market rules, a company bidding for over 30% of a listed Kuwaiti company must make the same offer to all remaining shareholders.
The transaction had been opposed by some shareholders and one of the key conditions for the deal to go through was the sale of Zain’s 25% in its Saudi mobile operator Zain KSA. This is because Etisalat is already present on the Saudi market through second largest mobile operator mobily.
Last week, Zain’s board approved a joint US$950m non-binding offer from Kingdom Holding Company (KHC) and Batelco for its stake in Zain KSA.
Kingdom Holding said today that its offer had not changed.
Its chair Prince Alwaleed Bin Talal said in a release: “We are continuing to execute our joint offer from Kingdom Holding and Batelco Group.”
For its part Batelco denied media reports that it was struggling to raise funding for the transaction due to political unrest in Bahrain.
CEO Peter Kaliaropoulos said in a release: “Events in the last few weeks may increase in the short term the cost for such financing but based on feedback from GCC and international banks, there is healthy interest and a competitive spirit, from banking partners to deliver the required financing.”
Etisalat was advised by Morgan Stanley and the National Bank of Kuwait.
