A note was sent out by Bharti Airtel PR last night, stating that “Bharti Airtel Limited has entered into an exploratory discussion with MTN Group Limited, South Africa. Current discussions are still at an early stage, are exploratory in nature and may or may not lead to any transaction.” MTN and Bharti shareholder Singtel have issued a similar statements.
The bid: Airtel has bid for 51 percent stake in MTN, valuing the company at $37 billion. The company is willing to pay 165 rand (around $22) per share, and has secured $12 billion from banks to finance the deal. MTN is reportedly looking for 180 rand (around $24) per share. [Financial Times, via Reuters]
Valuation: The Airtel bid values MTN at $37 billion. As per a statement from MTN to the JSE, it was valued at around $41 billion, almost as much as Bharti Airtel, at $44 billion.
Shareholders: the largest shareholder is the Alpine Trust, comprising of MTN management and staff and a private family, holds 23 percent in MTN, the South African Government Pension Fund holds 13.5 percent stake. [CNBC]
Competition: Others are also looking to acquire MTN – there is another Indian major – Reliance Communications – as well as Vodafone (NYSE: VOD) and China Mobile.
Advisors: As per reports Airtel is being advised by Standard Chartered, Singtel by Goldman Sachs. Merrill Lynch and Deutsche Bank are advising MTN. [CNBC]
Initially denied: The statements come a week after the Airtel’s CFO and Joint MD Akhil Gupta had denied any such acquisition plans.
Airtel already has a license to operate in Sri Lanka, and operations in Seychelles, the islands of Jersey and Guernsey. The Sri Lankan operations are set to begin this year. Anyway, here’s an advert from from MTN that ends with “go start something”. Bharti Airtel is certainly trying to:
Update: Airtel corp comm head Senjam Raj Sekhar has declined to comment on the details of the acquisition bid.