Kharafi defends Etisalat’s Zain bid

A major shareholder of Kuwait's Zain defended Etisalat's  $12 billion offer to buy 46 per cent of the telecoms carrier, questioning why another big Zain stakeholder pulled out of the deal and criticised it.
 
In a dispute playing out in dueling Kuwaiti newspaper advertisements, the Kharafi Group's Al Khair National for Stocks and Real Estate posted an ad in the al-Jarida daily on Wednesday saying Etisalat was an international company and its offer was beyond doubt.
 
A day earlier on Tuesday, Al Fawares Holding -- which is estimated to own less than five per cent of Zain -- accused Zain's management of failing to gauge the seriousness of Etisalat and threatened to take the matter to court.
 
 "We ask an innocent question: could keenness for shareholder interest be shown by ... throwing doubts on a deal which if successful would give generous returns to every shareholder?" the Kharafi company said in Wednesday's ad, adding that it welcomed any legal action and believes the country's judiciary was "the safe haven for all."
 
"(Al Fawares) is one of those who approved entering the deal and the National Investments Co (NIC) has a letter from them to prove they wanted to enter the deal with up to 100 million shares," Al Khair said.
 
On Sunday, Zain's board approved opening its books for due diligence by Etislat, which has offered to buy 46 per cent of the company in a deal worth just under $12bn.

Al Fawares, the opposing shareholder, said a 2009 offer from an Indian-led consortium to buy a stake in Zain turned out to be "not serious" and caused losses to shareholders.
 
Selling Zain's Saudi assets is one of the deal's conditions.
 
Meanwhile, A Kuwaiti opposition group has threatened to grill the finance minister over the proposed sale of a majority stake in Zain telecom to  Etisalat.

The Popular Action Bloc, which has four MPs in the 50-member house, vowed in a statement to question Mustafa al-Shamali if the state sells any of its shares in the company or even sanctions the sale.

The government directly owns 24.6 per cent of Zain, and the state-run pension agency holds around three per cent, making the government the largest shareholder with just over 27 percent.

Kuwait Investment Authority (KIA), the state sovereign fund, owns the government stake. It has a representative on Zain's board, which agreed on Monday to open the firm's books for due diligence to Etisalat.

The opposition group said it will also question the minister, who chairs KIA, if its representative on the board had agreed to due diligence decision without seeing an actual purchase offer from Etisalat.

KIA has not said it will sell any of its stake as part of the deal which is led by the Khorafi Group, the largest private shareholder in Zain with an estimated stake of 20 percent.

The opposition group also expressed its objection to the sale of Zain's assets in Saudi Arabia, a precondition for the deal.

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