Who will pay $14 billion for half of Zain?

The future of Zain, the Arab world's second-largest telco, has been under the spotlight for months now.

After weeks of rumours, it emerged yesterday that

. It may not own them all directly, but it has them for sale. When you take out the

, a sovereign fund that owns 25 per cent, and Zain itself, which holds 10 per cent of the company in treasury shares, that means Kharafi have managed to rope up about 70 per cent of all the Zain shares in free float on the market.

That's pretty incredible in and of itself, especially when,

, at no point has the Kuwaiti stock market, Zain, or Kharafi actually made a disclosure about any of this. That the second-largest telco in the Arab world - and Kuwait's largest public company - can effectively be bought out without disclosure is a pretty amazing story.

More amazing is though, is the fact that somebody is about to pay about US$14 billion for less than half of Zain.

"It is such an expensive price tag," one analyst said to me yesterday. "Far too expensive for a financial investor, and by any normal metric, too expensive for a strategic investor."

So who is buying Zain? A

. That is certainly not the case: to begin with, Adia does not invest within the GCC, and it has also said publicly that it will not take majority stakes or management control in big companies.

India's Reliance Telecom was often listed as a buyer, but

. But two common themes keep running through all the rumours - an Abu Dhabi fund is involved, and it is partnered with an Indian telco.

As

, one interesting possibility is Essar - one of India's largest mobile operators, and also one of its biggest diversified conglomerates - which

. The Dhabi Group is a big, well financed investment company owned by members of the Abu Dhabi royal family, and is often confused with a sovereign fund (it isn't, it manages the personal wealth of the royals).

Essar said it would link up with the Dhabi Group to make investments in the African telecom market, where Zain is the continent's second-biggest player.

Other than that, it is hard to imagine another Abu Dhabi - India hookup that would have the right combination of interest and cash. Another cashed up Abu Dhabi fund is

(the new name of the Abu Dhabi Investment Company) - it invests in the region, and buys companies, but hasn't shown a lot of interest in telecoms,

.

There is always the chance of a new fund emerging, in the same way that

appeared out of nowhere and bought Manchester City football club last year. But the Zain deal involves a far larger amount of money, and it is hard to imagine such a big deal being done by an ad-hoc group of investors.