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Bharti shares rise 3% after 3-day slide

Bharti shares rise 3% after 3-day slide
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First Published: Thu, May 28 2009. 12 32 PM IST
Updated: Thu, May 28 2009. 12 32 PM IST
Mumbai: Shares of Bharti Airtel bounced 3% on Thursday, as investors saw value in the firm after news of its renewed merger talks with South Africa’s MTN pushed shares down over 10% in the past three sessions.
“Leaving aside the merger, and the lack of clarity surrounding it, fundamentally the stock has no problem,” RK Gupta, managing director at Taurus Mutual Fund, said.
“The company is doing well in India, its business is diversified, and cellular growth in the rural market is still quite good.”
Bharti shares were up 3% at Rs791.80 by 11:56 am, while the broader 30-share BSE index was up 0.8%.
Bharti and MTN are working on a deal worth $23 billion in cash and stock, under which the Indian firm would get 49% of MTN, after MTN and its shareholders get a 36% stake in Bharti, with a full merger the long-term goal.
Under Indian regulations, the purchase of 15% in a listed company triggers an automatic open offer to buy a further 20% from the open market.
Four of MTN’s top 25 shareholders would reject a tie-up with Bharti based on terms unveiled this week and other big investors are unsure about the deal to create a telecom giant.
“There is a lot of confusion about the proposed merger,” Gupta said.
But investors who are looking at the company from a longer-term perspective may have seen the three-day fall as an opportunity to buy, he said.
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First Published: Thu, May 28 2009. 12 32 PM IST
More Topics: Bharti Airtel | Shares | BSE | Telecom | MTN |