Bharti shares fall on worries over higher MTN bid

Bharti shares fall on worries over higher MTN bid
Comment E-mail Print Share
First Published: Mon, Aug 10 2009. 01 15 PM IST
Updated: Mon, Aug 10 2009. 01 15 PM IST
Mumbai: Shares in top telecom firm Bharti Airtel fell as much as 4.8% on Monday to their lowest in over three months on worries the company will sweeten its offer to buy a stake in South Africa’s MTN.
On Friday, a source familiar with the negotiations told Reuters that Bharti may increase its offer by between 5 and 10%.
“We don’t understand the logic for this deal at all. Why does Bharti want to change from a company with a net cash position of $1 billion to a debt-ridden firm?” Sonam Udasi, vice president of research at BRICS Securities, said.
“We do not buy the argument the deal is going to add value. There is nothing in the deal to highlight as adding strategic value.”
Bharti shares fell to Rs365.50, their lowest since 29 April, before paring some losses to trade down 2.9% at Rs372.75 by 01:25 pm - making them one of the major losers in the broader BSE index, which was up 0.2%.
Bharti and MTN, which have been working on a complex $23 billion cash-and-share swap for over two months, said a week ago that exclusive talks would be extended until late August and that the terms of the potential deal may be adjusted.
Bharti and MTN hope that the deal will lead to a full merger, creating the world’s third biggest cell phone group, with more than 200 million customers and combined revenue of $20 billion.
Comment E-mail Print Share
First Published: Mon, Aug 10 2009. 01 15 PM IST
More Topics: Bharti Airtel | MTN | Telecom | Cellphone | Mobile |