Etisalat sets new date over Zain deal

Etisalat assures shareholders that it is making good progress on its Zain takeover bid, despite missing its deadline for the completion of due diligence earlier this month.

Powered by automated translation

Etisalat, the UAE's biggest telecommunications company, aims to complete the due diligence for its Dh44 billion (US$11.97bn) acquisition of a controlling stake in its Kuwaiti rival Zain by the end of next month.

The company missed a January 15 deadline to complete the review of Zain's finances, leading to worries that the biggest acquisition currently taking place in the Mena region could be derailed.

But Etisalat's bid "continues to make good progress", the company said yesterday.

"Etisalat is delighted with the recent progress in the due diligence process and wishes to reach a final agreement as soon as practically possible," said Mohammed Omran, the Etisalat chairman.

The company said: "In addition, Etisalat's discussions with 18 international and regional banks regarding the financing required to complete the proposed transaction continue, and it remains highly confident that it will be able to secure the necessary financing."

In September, Etisalat announced it had offered Zain shareholders 1.7 dinars a share for a 46 per cent stake.

The final progress and the results of the proposed transaction are due to be presented to the board by the end of next month.

This month, Etisalat said it missed its deadline because it had not received enough information from Zain to complete the due diligence process.

Later it emerged the deadline had been extended until the end of this month.

The delays have given rise to worries that a rival bidder could steal Etisalat's thunder.

Soon after the company missed its deadline, Cukurova Holding, a Turkish conglomerate that controls Turkcell, a telecoms operator, made a $7.89bn bid for a 29.9 per cent stake in Zain.

But Nasser al Kharafi, the chairman of the Kharafi Group, a major shareholder in Zain, claimed the offer was not legally binding as it was not posted on the Kuwait Stock Exchange.