Middle Eastern sovereign wealth funds are not the region's only investors eyeing U.S. assets. Kuwaiti bank Investment Dar, which invests according to Shariah or Islamic law, said at the Reuters Islamic Finance Summit that it could invest up to $800 million in a U.S. or European telecom, according to a Reuters report. A likely U.S. target could be troubled Sprint Nextel Corp., which said last week it might have to write down $31 billion for its purchase of Nextel -- assuming the U.S. government doesn't step in and quash any deal with an Islamic bank.
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An $800 million investment in Sprint would be less than 3%, well below the 10% stake that would elicit a review by the Committee on Foreign Investment in the United States. So one thing is certain, Dar is unlikely to invest in smaller telecoms, which could trigger the CFIUS review. That would mean that Dar couldn't drop below, say, an $8 billion market cap. But even Qwest Communications International Inc., with a $10 billion market cap, could raise red flags. Nonetheless, any investment could raise the hackles of any of a number of politicians on Capitol Hill. Another potential limiting factor is the bank's requirement that any investment provide an internal rate of return of at least 14%.
Dar has had a taste for Western assets -- particularly high-end ones. Last year it made a splash when it drove off with half of British luxury carmaker Aston Martin and bought London's Grosvenor House Hotel. - Matthew Wurtzel
See story from Reuters
See TheDeal.com: Ford finds Aston Martin buyer
See Dealwatch: Ford Motor Co.
