ADIA part of Zain stake group - report

Abu Dhabi Investment Authority said to be part of Asian group buying 46% stake in Kuwait telecom firm.

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By  Reuters Published  September 7, 2009

Abu Dhabi Investment Authority (ADIA) is part of a group that is in talks to buy a 46 percent stake in Kuwaiti telecom firm Zain, newspaper reports said on Monday.

Zain's chief executive Saad al-Barrak confirmed to Reuters on Sunday that shareholders were in talks to sell a stake in the group, declining to give further details.

An Asian group was in the final stages of buying a 46 percent stake in Zain, Al-Arabiya television reported on Sunday.

"Abu Dhabi's sovereign wealth fund is a part of the deal with the Asian investors," Kuwaiti daily al-Anbaa said in an unsourced report on Monday.

Zain's biggest shareholders are Kuwait's sovereign wealth fund the Kuwait Investment Authority (KIA), which owns 24.6 percent, and family-owned conglomerate Kharafi Group, which holds at least a 10.86 percent stake, according to the Kuwaiti bourse website.

Analysts estimate Kharafi owns about 20 percent in Zain through its units.

KIA will be keeping its stake in Zain, and will not be part of the deal, Anbaa reported.

In another unsourced report on Monday, daily Awan said that ADIA has concluded talks with the Kharafi Group, to sell 51 percent of Zain's shares to the authority.

Kharafi executives could not be reached for comment. A spokesman for ADIA could not be immediately reached for comment.

Al-Arabiya television reported that shareholders – among them the Kharafi Group – had agreed to sell their stake in Zain at a price of around 2 dinars ($6.96) a share to an Asian group and that an official announcement was due shortly.

The offer of 2 dinars per share reported by Al-Arabiya represents a 28 percent premium to Sunday's closing price of 1.56 dinars and values the stake at 3.93 billion Kuwaiti dinars ($13.68 billion), according to Reuters calculations.

Zain is the region's second-largest telco by market value and operates in 24 countries, including Nigeria and Saudi Arabia. (Reuters)

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