Zain board approves opening books to Etisalat

Zain board approves opening books to Etisalat






Monday,08 November 2010

Source : Agencies



KUWAIT: The board of Kuwaiti telecom Zain approved opening the company's books for due diligence by UAE's Etisalat which has offered to buy 46 percent of the firm, a source close to the deal told Reuters on Sunday.


Etisalat, the Gulf's second largest telecoms group, offered in September to buy a 46 percent stake in Zain for 1.7 Kuwaiti dinars (6.07 US dollars) a share, in a deal worth just under $12 billion. Etisalat said on Wednesday it was making any deal dependent on the sale of Zain's Saudi assets.

Earlier on Sunday, Zain said in a statement to the Kuwaiti bourse that its board would meet to discuss a request submitted by Kharafi Group's Al-Khair National to open Zain's books to Etisalat.

Zain, the Gulf Arab region's third-biggest telecoms firm, sold its African assets this year but still operates in high-growth Middle Eastern markets such as Iraq and Lebanon, among others.

Zain's shares closed 2.8 percent up on Sunday on the Kuwaiti bourse, while Etisalat's shares closed 0.5 percent higher on the Abu Dhabi bourse.

"They [board of directors] have approved the process of due diligence," a source close to the deal, who asked not to be named, told Zawya Dow Jones.

Etisalat said last week it would acquire 51 percent of the issued share capital of Zain, under an updated proposal, valued at about $11.7 billion.

Meanwhile, the Kuwaiti dinar was traded 0.280 against the US dollar on Sunday while its rate against the euro was at KD 0.392.

The Central Bank of Kuwait (CBK) said on its Web site that the rate of the national currency rose to KD 0.453 against the Sterling, KD 0.003 versus the Japanese yen, and was KD 0.291 vis-à-vis the Swiss franc.

Trading on the international financial market was largely stagnant in shadow of hike of the rate of the main currencies vis-à-vis the greenback, which dropped after issuance of statements by global influential economic quarters in the end of last week.

The US Federal Bank has declared a new plan to earmark $600 billion per month for stimulating economic growth, while the labor market showed positive signs.

Meanwhile, European and Asian markets issued statements on the interest rate, where Britain kept it at 0.5 percent, while the European Central Bank kept it at 1.0 percent.

In the Asian markets, India and Australia hiked the interest rate to, respectively, 6.25 percent and 4.75 percent, to keep inflation proportions within specific limits. Last week, the Bank of Japan declared keeping the interest rate at 0.1 percent - with the intention of stimulating lending in the local market.