Etisalat-Zain take-over closer to completion

Major Zain shareholder pushing for vote on Zain Saudi stake

Tags: Emirates Telecommunication Corporation (Etisalat), TanzaniaEmirates Telecommunications CorporationMergers and acquisitionsTakeoverZain Group (www.zain.com)
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Etisalat-Zain take-over closer to completion The Kharafi Group, Zain's second largest shareholder, is organising a board meeting at Zain to facilitate a take-over by Etisalat. (Getty Images)
By  Georgina Enzer Published  December 9, 2010

According to a report by Bloomberg, The Kharafi Group, a major shareholder in Zain, is calling on the telco for a board meeting discuss the sale of the mobile phone company's Saudi Arabian unit to facilitate a take-over bid by Etisalat.

Etisalat has put in a $10.5bn for a a 46% stake in Zain overall, but any deal would likely meet regulatory objections in Saudi Arabia, where both companies have operating units.

The Kharafi Group, the second largest shareholder in Zain, is pushing for a decision on Zain Saudi to facilitate the sale to Etisalat.

"We will call for a board meeting as soon as possible to vote on the sale of shares in Zain Saudi in the interests of shareholders in Zain," Al-Khair National for Stocks & Real Estate Company, owned by the Kharafi Group, said in an advertisement in local newspapers, according to Bloomberg. "The majority's decision by vote must be respected."

On November 7 2010, the Zain board approved a request by Al-Khair to conduct due diligence for the proposed stake sale to Etisalat.

Etisalat issued a press release on November 3, 2010 announcing an update in their proposal to purchase Zain shares. According to the release, their offer of $6 per share was subject to conditions which include: "the successful disposal by Zain of its entire interest in Zain Saudi; the negotiation of the definitive transaction documents; the completion of satisfactory due diligence; the receipt of all applicable regulatory approvals; and there being no material adverse change in Zain's business, financial, or regulatory affairs, as well as other customary conditions."

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