Etisalat’s efforts to buy a 46 percent stake in rival Middle Eastern operator Zain are at risk of being derailed by a rival bid from Çukurova, the Turkish conglomerate. According to a Financial Times report today, Çukurova is in discussions with Al-Fawares Holding, a Kuwaiti company that owns 4.5 percent of Zain and opposes the bid from Etisalat. It is thought that initial talks have centered on Çukurova buying a 29.9 percent stake in Zain for KWD1.72 billion (US$6.1 billion), but a source said that the proposed price and the stake size had changed. “There is progress, but there is no binding agreement of any sort, and we are also talking to other interested parties,” Sheikh Khalifa Ali Al-Sabah, who represents Al-Fawares on Zain’s board, told the newspaper. The Çukurova group, owned by billionaire Mehmet Emin Karamehmet, has a controlling stake in Turkcell, Turkey’s largest mobile operator.

Çukurova’s potential rival bid is the latest in a string of problems for Etisalat, which announced back in September it had agreed to buy 46 percent of Zain for almost US$12 billion from a consortium led by the Kuwaiti company’s largest private shareholder, the Kharafi family. The Kharafis directly and indirectly own about 20-25 percent of Zain, and require the support of other shareholders to drive the deal through. But this has proved problematic as many smaller shareholders – including Al-Fawares – are thought to oppose the sale. The main gripe of shareholders such as Fawares is that the deal will require Zain to offload one of its most valuable assets in Saudi Arabia to meet regulatory requirements (as Etisalat already has an existing operation in the country). Etisalat said in November that the deal could fail if definitive transaction documents were not signed by 15 January – this Saturday.