KUWAIT, Dec 8, (RTRS): A Kuwaiti court has delayed hearing a lawsuit from a Zain shareholder unhappy with Etisalat’s $12 billion bid for a 46-percent stake in the Kuwaiti telecoms company until Dec 15.
A court official said on Wednesday that the judge wanted more time to look at documents. The original date for the hearing was Wednesday. The shareholder — Al Fawares Holding — which owns a 4.5 percent stake in Zain, took legal action to halt the due diligence in the planned sale.
It said Zain’s board should not have opened its books to Etisalat without board members seeing the offer.
Al Fawares has also objected to a condition in the terns 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. Al Fawares has also threatened to sue potential buyers of Zain’s Saudi stake.
Kharafi Group, one of Zain’s major shareholders, has said it has gathered enough approvals from shareholders to tender the stake to Etisalat.
On Sunday, Al Fawares said it informed banks involved in the deal, including National Bank of Kuwait and UBS , that it will go to court against “whoever tries to buy or sell Zain Saudi.”
“Al Fawares confirms that continued violations ... on the assets of the company and the rights of the board of directors ... might push Al Fawares or other shareholders to go to court and ask for placing the company into receivership unless things are done right, transparency is practised and any attempts to sell Zain Saudi or any other asset of the company are halted,” the ad said.

A Zain spokesman said management does not comment on issues involving shareholders.
Etisalat officials were not immediately available for comment.
Zain is selling its position in Zain Saudi as a condition of the Etisalat deal. Both Etisalat and Zain have units in Saudi Arabia and compete for market share there.
Kharafi Group, one of Zain’s major shareholders, has said it gathered enough approvals from shareholders to tender the stake to Etisalat’s.
Some Kuwaiti analysts have said the dispute centres on commission fees being earned by Kharafi Group, as the arranger of the deal through its brokerage unit, National Investments Co
“Kharafi Group ... will earn a premium for gathering the shares, and could earn up to 200 million dinars ($712.7 million)” Hajjaj BuKhadour, an independent Kuwaiti analyst, told Reuters. “Others found this unfair and reacted this way to reach an agreement over that amount.”
Naser al-Nafisi, general manager of Al Joman Center for Economic Consultancy in Kuwait, said the legal action was a “serious challenge” to the deal.

“There is some logic to their point of view,” he said adding board members have the right to see the agreement with Etisalat.
He said Al Fawares is threatening more than one lawsuit to make sure that “if one doesn’t work, the other will.”
Zain shares closed up 4.4 percent on Sunday.
Separately, UAE Economy Minister Sultan bin Saeed al-Mansouri said in remarks published on Sunday that the Abu Dhabi government supports the deal. Etisalat is 60-percent owned by the UAE government.
He told Kuwait’s al-Qabas daily Zain was a “distinguished company with great geographic presence which could help us make up for some of Etisalat’s gaps in certain geographic locations.”
On Monday, Securities Group Co, a brokerage firm that has opposed the structure of deal to sell 46 percent of Kuwaiti telecom group Zain to Etisalat now wants to join the deal, a newspaper reported on Monday.

Al-Qabas daily said, without citing sources, that Securities Group has “informed the selling consortium ... it wants to join with shares owned by its clients.”
Securities Group chairman, Ali al-Mousa, confirmed the report to Reuters on Monday, but declined to provide any details.
Etisalat, has bid 1.7 Kuwaiti dinars per share for a 46 percent stake in Zain in a deal worth just under $12 billion.
The bid won the backing of major Zain shareholder Kharafi Group which began gathering a consortium of shareholders to tender shares to Etisalat.
But Securities Group, unhappy at not being part of the deal, ran an advertisement in Kuwaiti papers in October, offering Zain shareholders 1.65 dinars per share to try and counter the offer. However, the bourse vetoed the bid saying it was in contravention of its regulations.
Al Fawares Holding, which owns 4.5 percent of Zain, also opposes the sale process, and has threatened to sue potential buyers of the Zain’s Saudi unit, which is slated for divestment as part of the Etisalat deal.