Bharti Airtel ends MTN talks
, May 24, 2008
India's Bharti Airtel said on Saturday it had ended talks with South Africa's MTN Group after failing to reach agreement on the structure of what would have been the world's sixth-largest mobile operator.
Bharti, India's leading mobile operator, and MTN announced they were in exploratory discussions on May 5 to create an emerging markets mobile phone giant with over 130 million subscribers in around two dozen countries.
Media and analysts had speculated that Bharti, 30.5 percent owned by Singapore Telecommunications, was eyeing a 51 per cent stake in MTN or would engineer a merger between the two firms in a deal that would value MTN at up to $50 billion.
Bharti said after an in-principle agreement had been reached, MTN had presented a new structure that it saw as a "convoluted way of getting an indirect control of the combined entity" and could not accept it.
"MTN's thinking about acquiring Bharti is obviously unacceptable," said Gajendra Nagpal, chief executive at Unicon Financial, a New Delhi-based investment advisory firm.
"The market is going to lift Bharti's shares on Monday as there were fears of equity dilution in the company or it being highly leveraged due to the deal," he said.
Bharti shares rose 2.4 percent to 836.80 rupees on Friday in a Mumbai market that fell 1.5 percent, although its shares are still down 6.4 per cent since the talks were announced.-Reuters