Etisalat misses Zain deal deadline, to keep trying

Emirates Telecommunications Corp will continue talks to reach an accord on its $12-billion offer for control of Kuwait’s Zain after it missed a deadline on “unforeseeable delays” to complete the diligence process.

“The parties have not made sufficient progress toward completion of the proposed transaction in order to meet that deadline due to unforeseeable delays in Zain providing access to all relevant information,” Etisalat said in an e-mailed statement today. “The parties do continue to work toward the announcement of a definitive transaction.”

Emirates Telecom, the United Arab Emirates’s biggest phone carrier and also known as Etisalat, is aiming to expand its presence in the Middle East, where Zain operates in countries from Kuwait and Iraq to Bahrain after selling most of its African assets last year to Indian billionaire Sunil Mittal’s Bharti Airtel Ltd for $9 billion. For Zain, it is the second attempt by majority shareholders to sell control.

The bid by Abu Dhabi-based Etisalat to buy about 46 per cent of Zain, Kuwait’s largest mobile phone operator, expired on January 15. No new deadline has been set, one person familiar with the talks said today, declining to be named as the negotiations are private.

Etisalat got commitments from Zain investors holding about 40 per cent of the company, three people involved in the talks said on January 14, declining to be identified because the talks are confidential. Etisalat shares declined 0.9 per cent to 10.65 dirhams in Abu Dhabi today. Zain shares were unchanged at 1,460 fils in Kuwait City.

The fact that Etisalat continues to work towards an agreement is “a sign they’re still positive and still think the price is right,” said Jassim al-Saadoun, head of Al-Shall Economic Consultants in Kuwait.