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Bharti wants to pay $19bn for 51% of MTN

08 мая 2008

Sources say Indian operator willing to pay for controlling stake in African mobile group.

Bharti Airtel Ltd. will likely need financial assistance from its major shareholder Singapore Telecommunications Ltd. to complete the deal, people familiar with the situation said Wednesday.

"The intention is to make an offer of US$19 billion for a controlling stake of 51%. Bharti has yet to make an official offer and the talks are continuing," one person told Dow Jones Newswires.

The person didn't indicate when Bharti would make the offer.

"All options are open. It all depends on the price. If it's too high the talks could fail or there could be an agreement for a smaller stake. But Bharti would prefer to have control," the person said.

The comments came after Bharti and MTN said Monday that they are holding exploratory talks on a possible deal. A Bharti statement said Tuesday that it has not made any offer to buy all or part of MTN.

"At this stage MTN is not commenting further than the cautionary" statement issued Monday that notified the
Johannesburg securities exchange of discussions being held with Bharti, a spokeswoman for MTN said.

A marriage between Bharti and MTN would create a mobile telecommunications behemoth with a significant presence in Africa,
India and the Middle East. It will also give Bharti a footprint in the African telecoms market which has been dominated by local operators and European majors such as Vodafone Group and France Telecom.

"Bharti has the O.K from SingTel to go after MTN and if the deal happens it will probably need financial backing from SingTel," another person familiar with the situation told Dow Jones Newswires.

SingTel is 55% owned by
Singapore's state investment company Temasek Holdings. SingTel controls a 30.5% stake in Bharti and has minority stakes in operators in Thailand, Pakistan, Indonesia, Bangladesh and the Philippines. It also owns Optus, an Australian mobile operator.

The second person said that Bharti has yet to decide on how it will finance the deal.

"It could be debt, raising new capital, doing a joint bid with SingTel or other things. It's not decided and it's still not certain that Bharti's talks with MTN will be successful," the person said.

Analysts said that a deal makes sense for both SingTel and Bharti.

"Getting into these markets is positive in the sense that it's in line with SingTel's long-term strategy of getting into emerging markets," said
Macquarie analyst Ramakrishna Maruvada."The whole thing just boils down to the nuts and bolts of what price."

DBS Vickers said in a report that Bharti will likely fund the takeover partly through debt and equity with around US$7 billion being raised through a capital increase.

"It implies that SingTel can raise its stake in Bharti (currently valued at around $13 billion) substantially, which SingTel management has been very keen for quite some time," the report said.

A spokesman from Bharti declined to comment. SingTel declined comment.

Источник: Total Telecom

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