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Kuwait Court Dismisses Zain Lawsuit, Clears Deal Hurdle - ASHARQ AL-AWSAT English Archive
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KUWAIT, (Reuters) – A Kuwaiti court dismissed a lawsuit from a Zain shareholder unhappy with a $12 billion bid for a stake in the firm, clearing one key hurdle for buyer Etisalat.

Al Fawares Holding, which owns a 4.5 percent stake in Zain, took legal action to halt the due diligence in the planned sale.

The shareholder had said Zain’s board should not have opened its books to Etisalat without board members seeing the offer.

Rashed al-Radaan, Al Fawares’ lawyer, told Reuters the shareholder would appeal within the next few days.

Etisalat, the Gulf’s second-largest telecom operator by market value, has bid $12 billion for a 46 percent stake in the Kuwait telecoms firm, as it attempts to expand into high-growth Middle East markets.

In October, Kharafi Group, one of Zain’s major shareholders, said it had gathered enough approvals from shareholders to tender the stake to Etisalat.

Legal action could have delayed the transaction, or potentially scupper it. Etisalat has said any deal could fail if definitive documents are not signed by Jan. 15, 2011.

Al Fawares has also objected to a condition in the terms of the proposed deal that requires Zain to sell its stake in Zain Saudi to satisfy regulatory requirements.

Both Etisalat and Zain have operations in Saudi Arabia.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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