INDIA’S BIGGEST mobile operator, Bharti Airtel, has revived talks with South African rival MTN for a cross-share holding deal that could lead to a full merger and the creation of one of the world’s biggest telecoms groups.
The cash and share swap would value MTN at about 157 rupees (€13.64) per share – a market capitalisation of about €26 billion – a premium over its share price yesterday of more than 20 per cent.
Were the companies to merge, they would have a combined market capitalisation of about €45 billion based on today’s stock prices.
With more than 200 million subscribers, they would be the third-biggest operator in the world after China Mobile and Vodafone although their revenue of €15 billion would be only about one-third that of either of the other two.
“This potential transaction would combine the strengths of two leading emerging market operators,” said Bharti, controlled by Indian telecoms billionaire Sunil Bharti Mittal.
Talks last year ended in acrimony.
Under their new proposal, MTN would acquire 25 per cent of Bharti with a cash payment of $2.9 billion as well as new shares. Bharti would buy 36 per cent of MTN’s existing shares for 86 rupees plus 0.5 Bharti shares per share. – (Copyright The Financial Times Limited 2009)
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