June 27, 2010 / 10:26 AM / 7 years ago

UPDATE 1-Zain in stake talks with Etisalat-paper

* Zain, Etisalat officials met last week-report

* Etisalat declines to comment

(Recasts with Etisalat’s comment, adds background, share price)

KUWAIT/ABU DHABI, June 27 (Reuters) - Kuwaiti telecoms firm Zain (ZAIN.KW) is in talks with Abu Dhabi’s Emirates Telecommunications Corp ETEL.AD (Etisalat) about selling a majority stake in the group, a Kuwaiti newspaper report said on Sunday.

Both firms held meetings last week to discuss the potential deal, daily al-Seyassah said.

“Etisalat does not comment on market speculation and rumours,” Ahmed Bin Ali, group senior vice president for corporate communications at Etisalat told Reuters on Sunday.

The Abu Dhabi operator has said it is looking at options in India, including taking a 26-percent stake in the country’s second-biggest mobile operator Reliance Communications (RLCM.BO). [ID:nSGE657020]

On Sunday Reliance agreed to sell its telecoms tower business to GTL Infrastructure (GTLI.BO) but said it was still seeking to pursue the sale of a 26 percent stake in the firm. [ID:nSGE65Q00V]

A Zain spokesman could not be reached for comment on the report.

Earlier this month Zain’s chief executive Nabeel bin Salama said the firm was not in talks to sell further assets, after it closed the sale of its African assets, excluding Sudan and Morocco, to India’s Bharti Airtel (BRTI.BO) in a $9 billion deal. [ID:nSGE6570D2]

Zain shares were trading down 1.8 percent at 1023 GMT on the Kuwait bourse, on Sunday while Etisalat shares were trading flat on the Abu Dhabi bourse. (Writing by Eman Goma; Additional reporting by Stanley Carvalho; Editing by Dinesh Nair, Greg Mahlich)

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