A Kuwaiti court has delayed hearing a lawsuit from a Zain shareholder unhappy with Etisalat’s $12bn bid for a 46 percent stake in the Kuwaiti telecoms company until Dec 15.
A court official said on Wednesday that the judge wanted more time to look at documents. The original date for the hearing was Wednesday. 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.
It said Zain’s board should not have opened its books to Etisalat without board members seeing the offer.
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 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.
Al Fawares has also objected to a condition in the terns 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. Al Fawares has also threatened to sue potential buyers of Zain’s Saudi stake.
Kharafi Group, one of Zain’s major shareholders, has said it has gathered enough approvals from shareholders to tender the stake to Etisalat.
On Monday, Securities Group, which had also held opposed the deal, said it would tender to the offer.
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