Etisalat may have to settle for smaller Zain stake initially

Etisalat may settle for a significant minority stake in Kuwait’s Zain Group after opposition from some shareholders to a takeover threaten to delay the sale. The UAE operator was in talks to buy a 46 per cent stake in Zain, from a consortium led by the Kharafi Group conglomerate. However, citing two unnamed sources close to the deal, Reuters said that stake had now been cut to 40 per cent.

The delay comes from action by the Al Fawares Holding, which owns a 4.5 per cent stake in Zain, which has launched legal action to halt the due diligence in the planned sale. A ruling on their action is not due until December 22.

Although the initial deal may be for just 40 per cent of the company, Etisalat could still build up its stake over time to secure majority control.

“Please note that we do not comment on market rumours and we have not yet issued any official statement on this regard yet,” Etisalat chairman Mohammed Omran said in a statement.