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Tue 1 Mar 2011 04:10 PM

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Etisalat's bid for Zain stake in peril as NIC exits

Doubt cast on $12bn takeover bid as commitment to sell ends without comment from Zain

Etisalat's bid for Zain stake in peril as NIC exits
Abu Dhabi-listed Etisalats has made a $12bn takeover offer for Kuwait rival Zain

Abu Dhabi-listed Etisalat's $12bn takeover of Kuwait rival
Zain may be in jeopardy after the deal's architect said on Tuesday its
commitment to sell the 46 percent stake had ended.

The statement from Kuwait's National Investments Co (NIC)
came after a due diligence deadline of February 28 expired without comment from
either Zain or Etisalat.

Zain shareholder, the Kharafi group, has led the stake sale
through its unit NIC.

Tuesday's statement, issued on the Kuwaiti bourse website
after market hours, was the latest setback in the protracted deal, first
announced in September.

In late February, Zain turned down three bids for its quarter-stake
in affiliate Zain Saudi.

This must be sold for Etisalat's Zain takeover to be
completed because Etisalat is already active in Saudi Arabia through unit
Mobily, while other Zain shareholders remained bitterly opposed to the Etisalat
deal.

NIC shares ended 7.1 percent lower, Zain fell 1.5 percent
and Etisalat dropped 0.5 percent.

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