Kharafi Group has invited minority shareholders in the Kuwaiti telecommunications group Zain to join in its sale of a 46 per cent stake of the company to Etisalat.
The offer by Etisalat of Dh38.56 billion (US$10.49bn), or 1.7 Kuwaiti dinars a share, could lead to one of the Gulf's largest acquisitions and make the company one of the world's largest telecoms operators. Kharafi Group of Kuwait, which is the second-largest shareholder in Zain, with 13 per cent, took out an advertisement in the country's Al Qabas daily calling on small shareholders to take part in the sale.
The advertisement by National Investments, which is controlled by Kharafi, addresses shareholders who own no more than 300,000 Zain shares, equal to a fraction of 1 per cent of Zain. The Kuwaiti government is the largest shareholder, with 24.6 per cent. On their first trading day since the Etisalat announcement, shares in Zain Saudi Arabia yesterday rose by up to 5.7 per cent. They were up a further 3 per cent this morning.
The announcement of the bid has raised questions about the future of Zain's 25 per cent stake in Zain Saudi Arabia. The Saudi mobile market has three competitors: the state-controlled Saudi Telecom; the Etisalat affiliate Mobily; and Zain Saudi Arabia. Qatar Telecom may seek to buy Zain Saudi Arabia, which would clear a regulatory hurdle for the Etisalat deal, according to Sico bank, based in Bahrain.
Qatar Telecom has so far given no reaction to the Sico announcement.
* with agencies
