Bharti’s Chairman Grows More Confident of MTN Deal
Posted by telcobizpedia on August 24, 2009
From http://online.wsj.com/article/SB125084972837849039.html?mod=rss_india_news on August 24, 2009
By COSTAS PARIS
Bharti Airtel Ltd. Chairman and Managing Director Sunil Mittal said the second extension to talks with MTN Group Ltd. of South Africa signals that a deal may be worked out this time around.
“It gives us more confidence, but you never know with these things until the last moment,” Mr. Mittal said in an interview Friday.
Mr. Mittal’s comments came after Bharti and MTN extended their talks until Sept. 30 without giving a reason.
MTN and Bharti, India’s largest mobile-phone operator by subscribers, in May revived talks to create a telecommunications company with annual revenue of at least $20 billion and 200 million subscribers.
People familiar with the situation said Friday that Bharti and MTN have extended their talks to settle differences on pricing and the makeup of the combined entity’s board. The two companies have described their prospective deal as a $23 billion merger.
Mr. Mittal said he wasn’t in a position to confirm or deny whether Bharti would sweeten its offer.
A second person said MTN’s management and some shareholders are asking for an additional $1 billion from Bharti to complete the deal.
The person said there will be more clarity when MTN releases its half-year earnings on Thursday.
The basic terms announced in May would see Bharti accumulate a 49% stake in MTN, buying a stake directly for cash and newly issued global depository receipts, plus receiving MTN shares as part of the swap.
MTN would buy a 25% stake in Bharti for $2.9 billion in cash plus new shares, while stock received by its shareholders would take its stake in Bharti to about 36%.