New Delhi: Singapore’s telecom giant SingTel, which holds over 30% stake in Bharti Airtel, may join the Indian mobile operator as a co-buyer in the bid to acquire South Africa’s MTN, analysts said.
By virtue of its 30.5% stake in Bharti Airtel, SingTel would anyway have an indirect interest in MTN’s buyout by the Indian firm, but there is a “reasonable probability” that the Singapore firm gets directly involved as a co-buyer, analysts at Citigroup Global Markets said in a research note to their clients.
Earlier this week, MTN and Bharti announced separately that they have initiated “exploratory discussions” for a possible acquisition of the South African firm.
“SingTel is the largest shareholder in Bharti with a 30.5% stake and consequently has interest in this transaction anyway,” Citigroup’s Anand Ramchandran wrote in the research note.
“That said, given the size of any potential acquisition, we see a reasonable probability that SingTel gets directly involved with Bharti as a co-buyer as well,” the note said.
Terming Bharti and MTN as “two equal-sized entities in market value,” Citigroup said that MTN’s market cap of 35 billion dollars compares with $42 billion for Bharti.
“MTN’s 68 million wireless subscriber base (across Africa) as of March 2008 compares with Bharti’s 62 million as of the same date,” it noted adding that MTN’s 4.1 billion dollars in EBITDA for year ended December 2008 compares with 2.8 billion dollar for Bharti in the same period.