New Delhi: India’s number one mobile operator Bharti Airtel’s negotiations with South African telecom major MTN is now headed towards complete takeover by the former, The Wall Street Journal said quoting a person familiar with the situation.
“Bharti still wants majority control (a 51% stake) but MTN prefers a full takeover, which in South Africa, can be portrayed as a merger of equals. Talks this week are focused on this (full takeover) and ways it could be done,” WSJ said in a report posted online.
The person said Bharti was considering paying as much as $20 billion in cash, said the paper.
Bharti on Tuesday said it was in talks with MTN to “combine the strengths of the two leading players from emerging markets, and is accordingly veering toward possible structures to achieve this objective”.
Bharti Group chairman Sunil Mittal is understood to have held talks with the South African telecom major MTN’s top management in London yesterday to work out a broad scheme of arrangements for a possible merger between the two companies.
Mittal met MTN chairman M C Ramaphosa, CEO P F Nhleko and single majority stakeholder Azim Mikati to put forward Bharti’s proposals in which the Delhi-based company is said to have insisted on ‘exclusivity agreement’ with MTN.
An exclusivity agreement would bar MTN from sharing any information or arrangements for a merger with any other firm. Bharti management is also believed to have offered 168 rands a share to MTN shareholders, while the South African company wants a higher price.
It is also learnt Bharti wants to offer 70% stock and 30% cash for a possible merger to MTN shareholders, whereas the South African firm has asked a higher price.