KUWAIT, (Reuters) – A Kuwaiti court said it would rule next week on a lawsuit from a Zain shareholder unhappy with Etisalat’s $12 billion bid for a 46-percent stake in the Kuwaiti telecoms company.
A court official said on Wednesday that the ruling would be handed down on Wednesday, Dec. 22.
The shareholder – Al Fawares Holding – which owns a 4.5 percent stake in Zain, took legal action to halt the due diligence in the planned sale.
Al Fawares had said Zain’s board should not have opened its books to Etisalat without board members seeing the offer.
An initial hearing scheduled for Dec. 8 was delayed after a judge postponed it for a week to look at documents.
Hussein al-Ghareeb, Zain’s lawyer, told the court on Wednesday that the due diligence process started on Nov. 23.
“Accordingly I request that the court dismisses the urgent part of this case (stopping the due diligence) since the process has already started,” Ghareeb said.
“The due diligence is done in stages, so the urgent part of the case is still valid,” Rashed al-Radaan, Al Fawares’s lawyer told the court.
Etisalat, the Gulf’s second-largest telecom operator by market value, has made a bid of 1.7 Kuwaiti dinars per share for the 46 percent stake in Zain, potentially propelling the UAE firm into high-growth markets in the Middle East.
Legal action could delay the transaction, or potentially scupper it. Etisalat has said any deal could fail if definitive documents are not signed by Jan. 15, 2011.
Zain’s shares closed 4.1 percent higher at a 15-month high on Wednesday.
“The probability of the deal going through is getting higher the nearer we get to the end of the due diligence process,” said telecoms analyst Irfan Ellam at Al Mal Capital.