Securities Group chairman said it was 'unfair' that Kharafi Group should decide who joins the consortium
Kuwait's bourse has vetoed a bid by Securities Group Co for about five percent in telecom group Zain, a bourse official said, a move designed by Securities Group as a protest against the conduct of a bid for a much bigger stake in Zain.
The official told Reuters the Kuwaiti bourse had ruled against investment firm Securities Group's attempt to buy the shares, made in a newspaper advert published on Sunday, as being in contravention of its regulations.
The official said on condition of anonymity that: "Any buying or selling transaction of shares above a five percent stake in a company should take place through the stock exchange."
Etisalat, the Gulf's second largest telecom operator by market value, last month bid 1.7 Kuwaiti dinars a share for a 46 percent stake in Zain in a deal worth just under $12 billion.
The bid won the backing of major Zain shareholder Karafi Group, which began gathering a consortium of shareholders to tender to the offer. But Securities Group, unhappy at not being part of the deal, ran an advert in Kuwaiti newspapers offering Zain investors 1.65 dinars a share for their holdings.
Securities Group, which said it wanted about a five percent stake, said small shareholders with 50,000 shares or less were the priority and they would be paid "in advance, in cash and immediately".
Kharafi Group has said it had accumulated enough shares to tender to the offer through its National Investments Co (NIC) brokerage business.
But Securities Group chairman Ali al Mousa said it was unfair that Kharafi Group should decide who joins the consortium for the sale to Etisalat.
Last week he told Reuters: "If you want 46 percent, ask all (shareholders) for the 46 percent, but you can't tell a shareholder that you will buy all his shares, and tell another shareholder you choose not to buy from him."
Etisalat said it was aware the deal had faced some opposition from certain shareholders in Kuwait but said most of the reaction had been very positive.
On Tuesday, NIC general manager Hamad al Ameeri said Kharafi Group still had approvals from clients to secure the 46 percent for the bid.
One analyst said Securities Group's intervention looked unlikely to succeed.
"The danger (to the deal) is still limited. The probability of the deal failing is limited because they (Kharafis) have the 46 percent," said Naser al-Nafisi, general manager of Al-Joman Center for Economic Consultancy, noting high-level mediation was reportedly ongoing and could resolve the issue. (Reuters)