Johannesburg: Parting of ways by Indian cellular major Bharti Airtel and South African mobile giant MTN on Tuesday after over 4-month (reportedly) long merger talks has elicited mixed feelings among investment advisors here.
While, the announcement that the telcos had mutually agreed to end discussions on a possible merger that would have created the world’s third largest mobile company did not surprise Investec Asset Management advisor Chris Stewart, who predicted it a week ago.
Vestec MD Paul Therombie, a strong supporter of the deal, expressed disappointment that discussions had ended.
“I think we’ve been vindicated seven days further on,” Stewart said in a discussion on the issue here on radio.
“We were always sceptical of the deal taking place,” he said, adding “getting the regulatory approvals and getting the deal structure right was only the first hurdle. The other would have been convincing MTN shareholders that the price was appropriate and that hurdle had not even been approached yet”.
Stewart said in a deal of this nature, there was always a desire to compensate South African shareholders with scrip which tended to be listed offshore.
Unless one can arrange some sort of dual listing programme, than those shares typically count for an individual’s offshore allowance and given exchange control regulations it’s quite difficult sometimes for South African shareholders to accept those terms, said Stewart.