Etisalat’s attempted acquisition of a 46% stake in Zain is facing more trouble in the form of competition from the Turkish conglomerate Cukurova, which is currently in talks with Zain shareholder Al-Fawares Holding.
The UAE-based operator’s proposed purchase has already faced opposition in the form of legal action from several minority shareholders; the Kuwaiti firm Al-Fawares Holding, which has a 4.5% stake in Zain, has been a particularly vocal detractor of the deal.
Cukurova is reportedly interested in purchasing a 29.9% stake in Zain at a cost of KWD1.72 billion (US$6.1 billion), although other sources have since claimed that these figures have been altered since initial reports emerged. The conglomerate holds a majority stake in the largest mobile operator in Turkey, Turkcell.
“There is progress, but there is no binding agreement of any sort, and we are also talking to other interested parties,” said Sheikh Khalifa Ali Al-Sabah, the Zain board member who represents Al-Fawares.
This new development is a further setback to Etisalat’s bid, which has been plagued with difficulties since it first announced in September that it had agreed a US$12 billion deal for a 46% stake in Zain with several of the operator’s shareholders. This group is led by the Kharafi family, who are the operator’s largest private shareholders; however, as their stake is around 20% to 25% of the company, the deal will only close if it is supported by enough other shareholders.
This support has not yet materialised, with many minority shareholders taking exception to the fact that Zain’s highly prized Saudi Arabian operations would need to be sold in order for the deal to close - as Etisalat already operates in the Kingdom, owning Zain’s operations would bring it into violation of regulatory laws.
Etisalat has laid down January 15th – tomorrow - as the deadline for final transaction documents to be signed, claiming in the November that the deal would likely fail unless this deadline was met.