KUWAIT: A shareholder of Kuwait’s Zain said on Tuesday it was suing the telecoms carrier’s management for failing to gauge the seriousness of Etisalat’s offer to buy 46 percent of the company.
"Al Fawares Holding, as a major shareholder of Zain, confirms it will sue Zain, its respected chairman and members of its board because of their decision to open the company’s books to the UAE’s Etisalat … (without discussing the offer in a board meeting) to ensure its seriousness … and guarantees," the company said in a front-page advertisement in al-Watan daily.
Zain’s board approved opening its books on Sunday for due diligence by Etisalat, which has offered to buy 46 percent of the company in a deal worth just under $12 billion.
But Al Fawares said a 2009 offer from an Indian-led consortium to buy a stake in Zain turned out to be "not serious" and caused losses to shareholders.
Zain’s shares were down 3 percent on the Kuwait Stock Exchange at 640 GMT on Tuesday.
Al Fawares did not say when it was taking action and its officials could not be immediately reached for comment. However, analyst Naser al-Nafisi, general manager of Al Joman Center for Economic Consultancy, said taking legal action could delay the stake sale.
"A judge could order a halt on the deal until he decides on the case," he said adding Al Fawares, which he says owns less than 5 percent of Zain, wants "to see the details of the deal."
Selling Zain’s Saudi assets is one of the deal’s conditions.
Al Fawares said any asset of Zain is an asset for all its shareholders, and selling shares would "harm all shareholders who will not take part in the deal."
Last month, Kharafi Group, one of Zain’s major shareholders, said it gathered enough approvals from shareholders to tender to Etisalat’s bid for a 46 percent stake.
The group asked National Investments Co (NIC), which it owns, to secure the shareholder support required for the deal.
Last month, Kuwait’s bourse vetoed a bid by Securities Group Co for about 5 percent in Zain, which was a move designed by Securities Group as a protest against the the conduct of a bid for a much bigger stake in Zain.
