One of Zain’s shareholders, al-Fawares Holdings, has threatened the Kuwaiti incumbent with legal action over its proposed merger with the UAE’s Etisalat.
The Kuwaiti private equity group, which owns just under 5% of Zain, took out an advertisement on…
One of Zain’s shareholders, al-Fawares Holdings, has threatened the Kuwaiti incumbent with legal action over its proposed merger with the UAE’s Etisalat.
The Kuwaiti private equity group, which owns just under 5% of Zain, took out an advertisement on the front page of Kuwaiti daily al Watan stating that the proposed 51% takeover of Zain’s Middle Eastern assets by Etisalat deal does not offer good value for smaller shareholders.
It added that it was preparing legal action against Zain and its chairman for opening its books to Etisalat without first calling a meeting of the board of directors.
Furthermore, al-Fawares claims that Zain has yet to see Etisalat’s offer, or establishing whether the Emirati company can pay for control. It also alleges that Zain opened its books at the behest of the al-Kharafi family, one of Zain’s larger shareholders.
The Kuwaiti telco had agreed at close of business on November 5 that it was going to allow Etisalat access to its accounts.
Zain issued a statement on November 8 saying the one of the conditions of a proposed deal would be the sale of Zain’s 25% interest in Zain Saudi Arabia. For its part, Zain Saudi Arabia also released a statement, saying that it was planning to review its capital structure by reducing issued capital from SR14bn (E2.7bn) to SR7.3bn (E1.4bn) and company shares from 1.4 billion to 732,843,885 by eliminating one share for every 2,096 shares in total.
However, the proposed Al-Fawares lawsuit could delay the process – especially if it calls for a judicial review.
Zain said that it could not add any more to the story, Etisalat was unavailable for comment and the al-Fawares Group declined to comment.
