Commentaries

Zain’s heady stake sale could disappoint

Alexander Smith

Sep 10, 2009 08:25 UTC

Zain by name, zany by nature. A group of Indian telecoms companies and a Malaysian billionaire have promised to shell out an eye-watering $13.7 billion for 46 percent of the Kuwaiti telecoms operator, the Arab world’s third largest.

But minority investors hoping to cash out may have to think again. First, the offer has been engineered by — and for — the family-owned Kharafi Group, which is selling 20 percent of Zain, and its associates. Second, there’s no guarantee the deal will actually be completed.

Even Kharafi reckons it will take another four months to complete the sale, which involves the consortium paying 2 dinars per share, a chunky 45 percent premium over Zain’s current price.

There is also considerable uncertainty about who exactly some of the mooted buyers are. Little is known about India’s Vavasi Group or Malaysian billionaire Syed Mokhtar al-Bukhary, who have teamed up with Indian regional telecom companies Bharat Sanchar Nigam and Mahanagar Telephone Nigam.