Kuwait court dismisses Zain lawsuit, clears deal hurdle

KUWAIT (BestGrowthStock) – A Kuwaiti court dismissed a lawsuit from a Zain shareholder unhappy with a $12 billion bid for a stake in the firm, clearing one key hurdle for buyer Etisalat.

Al Fawares Holding, which owns a 4.5 percent stake in Zain, took legal action to halt the due diligence in the planned sale.

The shareholder had said Zain’s board should not have opened its books to Etisalat without board members seeing the offer.

Rashed al-Radaan, Al Fawares’ lawyer, told Reuters the shareholder would appeal within the next few days.

Etisalat, the Gulf’s second-largest telecom operator by market value, has bid $12 billion for a 46 percent stake in the Kuwait telecoms firm, as it attempts to expand into high-growth Middle East markets.

In October, Kharafi Group, one of Zain’s major shareholders, said it had gathered enough approvals from shareholders to tender the stake to Etisalat.

Legal action could have delayed the transaction, or potentially scupper it. Etisalat has said any deal could fail if definitive documents are not signed by January 15, 2011.

Al Fawares has also objected to a condition in the terms 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.

(Reporting by Eman Goma; Writing by Amran Abocar; Editing by Jon Loades-Carter)

Kuwait court dismisses Zain lawsuit, clears deal hurdle