Etisalat remains "interested" in acquiring a controlling stake in Zain and has not changed its stance on the acquisition despite missing a second deadline to complete its due diligence on the deal.
Yesterday, a major shareholder in Zain yesterday dealt a serious blow to Etisalat's US$11 billion (Dh40.4bn) takeover bid for a 46 per cent stake in the Kuwaiti company worth 1.7 dinars per share.
The National Investments Company, a brokerage firm that is majority-owned by Kuwait's Kharafi Group, which is the second-largest shareholder in Zain, said it ended talks with Etisalat after the UAE company missed a second deadline to complete the due diligence process.
However, Etisalat said that it has collected all the information related to the due diligence of Zain and is in the process of analysing the data, said Ahmed bin Ali, the senior vice president of corporate communications at Etisalat.
"Consequently the results will be discussed with the sellers in a later stage, and the final results will be presented to Etisalat's board of directors to make a decision in this regard," Mr bin Ali said.
Zain shares plunged almost 6 per cent in trading on the Kuwait Stock Exchange today to trade at 1280 Kuwaiti fils. It fell as much as 7.9 per cent before rebounding later in the trading day.
The likelihood that the deal would succeed grew more remote last week after a top executive and shareholder of Zain said the deal would not happen.
Sheikh Khalifa Ali Al Sabah, a member of Zain's board of directors, a shareholder in the company and a member of Kuwait's ruling family, said the absence of a buyer for the company's Saudi Arabian unit meant the Etisalat deal could not proceed.
Batelco, the Riyadh Group and Kingdom Holding Company, the investment firm run by billionaire Prince Alwaleed bin Talal, each submitted an offer to purchase the 25 per cent stake in Zain Saudi Arabia that its parent company owns.
Each of those bids were rejected by Zain's board of directors last month.
Zain released a statement to the Kuwait Stock Exchange today dismissing reports that it has received any new offers to buy its stake in its Saudi Arabian subsidiary
"The management has not received any new offers with this regard [Zain Saudi Arabia stake]," the company said.
dgeorgecosh@thenational.ae
