UPDATE 2-Kuwait's Securities eyes KIA's stake in Zain

* Interested in sovereign wealth fund’s 24 pct stake

* No talks held yet, but carrying out studies

* Zain shares close flat

(Recasts, adds company comment, background, share price)

By Eman Goma

KUWAIT, Oct 11 (Reuters) - Kuwait investment firm Securities Group Co SGCK.KW is studying a bid to buy a stake of up to 24.6 percent stake in telecom firm Zain ZAIN.KW held by the country's sovereign wealth fund, its chairman said on Sunday.

Bader al-Saad, managing director of the Kuwait Investment Authority (KIA), said on Oct. 5 the fund might sell its Zain stake, though the fund is not party to talks between shareholders, the telecom firm and potential buyers.

In a newspaper advertisement on Sunday the Securities Group, which manages assets of about $2 billion, said it is undertaking the necessary studies to present an offer to buy “a part or all” of the KIA’s stake in Zain.

“This is a response to the announcement of KIA saying they are considering selling a stake (in Zain) ... all we are saying is that we are interested,” Securities Group’s Chairman and Managing Director Ali al-Mousa told Reuters on Sunday.

Mousa said that the firm is not in talks with KIA, and had not submitted an offer for a stake.

The Securities announcement is the latest twist in the Zain sale since it said earlier this year it planned to sell its Africa assets.

In September, shareholder Kuwaiti conglomerate Kharafi Group began looking at how to raise its stake in the group after agreeing to sell 46 percent of Zain to a consortium led by India's Vavasi Group and including telecoms firms Bharat Sanchar Nigam [BSNL.UL] and Mahanagar Telephone Nigam MTNL.BO, and Malaysian billionaire Syed Mokhtar al-Bukhary.

The deal would be the biggest overseas acquisition into the Middle East, worth about $14 billion dollars. [ID:nBOM474905]

Securities Group Co’s announcement is “definitely not related” to Kharafi Group’s plans to sell a majority stake in the Kuwaiti telecoms firm, Mousa added.

It did not say how much it would be prepared to pay for the shares, only adding that it supports KIA’s earlier statement that 2 dinars per share is a good price.

“If I get good returns even two seconds after buying it, I’m going to (sell it),” Mousa said.


Separately, daily newspaper Awan said on Sunday, citing sources in KIA, that the authority has received new offers to sell its stake in Zain, and is currently studying the offers.

“(KIA) does not mind selling a majority of its stake in Zain if it found the convenient selling opportunity and with a high price,” Awan said, citing the KIA sources.

KIA was not immediately available for comment.

In July, the KIA sold its 19.8 percent stake in Islamic lender Boubyan BOUK.KW in an auction in which Securities Group and National Bank of Kuwait NBKK.KW competed.

Zain’s shares closed flat after falling as much as 3 percent during the session.

“Zain is trading well above our fundamental valuation (1.08 dinars) with the prospect of a consortium ... taking a 46 percent stake at 2 dinars,” Nomura said in a note on Oct. 9.

“The fact that the stock is trading at 1.36 at present suggests the process and timeline to acquire the stake is not obvious.” (Reporting by Eman Goma and Rania El Gamal; Editing by John Irish and Simon Jessop)