Etisalat says it is committed to acquiring a controlling stake in Zain, despite missing a second deadline to complete its due diligence on the deal.
The UAE operator has collected all the information related to the due diligence and is in the process of analysing the data before making a final decision, said Ahmed bin Ali, the senior vice president of corporate communications at Etisalat.
"Consequently the results will be discussed with the sellers in a later stage, and the final results will be presented to Etisalat's board of directors to make a decision in this regard," said Mr bin Ali. Etisalat and Zain are "still in talks", he said.
A major shareholder in Zain yesterday dealt a serious blow to the US$11 billion (Dh40.4bn) takeover bid for a 46 per cent stake in the Kuwaiti company worth 1.7 dinars per share.
The National Investments Company, a brokerage firm majority owned by Kuwait's Kharafi Group, the second-largest shareholder in Zain, said it ended talks with Etisalat after it missed a second deadline to complete due diligence.
Zain shares plunged almost 6 per cent in trading on the Kuwait Stock Exchange yesterday to close at 1.28 dinars. Etisalat shares closed less than 1 per cent down on the Abu Dhabi Securities Exchange at Dh10.80.
Irfan Ellam, a telecommunications analyst with Al Mal Capital, said Etisalat needed to determine if the stake remained available for sale. "There is no point in talking to Kharafi at a later date about the results of the due diligence if the stake is no longer available," he said. "Alternatively, Kharafi needs to tell Etisalat whether the deal is still on or not."
The likelihood that the deal will succeed grew more remote last week after a top Zain executive and shareholder said it would not happen.
Sheikh Khalifa Ali Al Sabah, a member of Zain's board of directors, a shareholder in the company and a member of Kuwait's ruling family, said the absence of a buyer for the company's Saudi Arabian unit meant the Etisalat deal could not proceed.
Batelco, the Riyadh Group and Kingdom Holding Company, the investment firm run by the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud, each submitted an offer to purchase the 25 per cent stake.
All bids were rejected by Zain's board of directors last month.
Zain released a statement to the Kuwait Stock Exchange yesterday dismissing reports it had received new offers.
"The management has not received any new offers with this regard [the Zain Saudi Arabia stake]," said the company.
