Zain takeover bid expires but Etisalat presses on

Zain takeover bid expires but Etisalat presses on

Melissa Chua  |   January 17, 2011
The United Arab Emirates’ largest carrier, Emirates Telecom (better known as Etisalat), is once again facing hurdles in its bid to control Kuwait’s Zain but has not given up hope that negotiations may finally reach fruition.
Etisalat missed the January 15 deadline to buy 46% of Zain, Kuwait’s largest mobile phone operator and no new deadline has been set, Bloomberg reported
The deadline had apparently been missed due to ‘unforeseeable delays’ in the negotiation process, but a statement from Etisalat had indicated that the involved parties ‘do continue to work toward the announcement of a definitive transaction’.
Etisalat’s takeover bid has been met with complications in the form of objection from Zain’s minority shareholders. Citing confidential sources, Bloomberg said Etisalat had gotten commitments from Zain investors holding about 40% of the company’s shares, but failed to gain approval from other shareholders.
A notable holdout is Al-Fawares Holding, which holds a 4.5% stake in Zain.
Al-Fawares’ owner Sheikh Khalifa Ali Al-Sabah had indicated he was seeking other buyers, including Cukurova Holding, one of the largest shareholders in Turkey’s Turkcell.
While Sheikh Khalifa had said his negotiations were ‘non-binding’, CNBCs Arabiya Television had reported on January 12 that Cukurova had agreed to buy a 29.9% stake in Zain for 1.72 Iraqi Dinars ($6.10) a share. Etisalat had offered 1.7 Iraqi Dinars a share.
The latest episode marks the second time Zain’s shareholders have tried to sell control.
Controlling a majority stake in Zain would help Etisalat expand its presence in the Middle East, where Zain operates in countries ranging from Kuwait and Iraq to Bahrain. Zain had previously sold its African assets to India’s Bharti Airtel for $9 billion.
Melissa Chua

Frontpage Content by Category

As 2011 dawns, industry experts predict what might happen in the year ahead


Adam Satariano and Peter Burrows
Deal delayed by lengthy trials, technical negotiations
Mark Sten, Globys
Carriers need to shift from blasting large segments to delivering highly personalized communications

Frontpage Content by Category with Image

Sponsored by SAP
The activity-based costing methodology enables telcos to acquire a deeper understanding of costs and profitability. Find out more in this webinar.


Staff writer
Handsets supplanting PCs, TVs by pre-sleep usage
Staff writer
To lead all sales, marketing and operations activities for HTC in China