Bharti shares rise as MTN talks deadline looms - TechCentral

Bharti shares rise as MTN talks deadline looms

MTN head office in Johannesburg

Shares in Bharti Airtel rose Tuesday as investors awaited an 
announcement by the top Indian mobile firm and SA’s flagship group MTN on plans for a groundbreaking tie-up.

Shares of Bharti Airtel rose 1% percent or 4,50 rupees to 
418,85 a day before the deadline to conclude negotiations on
creating an emerging market telecommunications powerhouse.

The estimated US$24bn alliance could prove the world’s
 biggest cross-border deal this year.

The deadline for conclusion of discussions, which have already
 been extended twice, was Wednesday.

Talks have gone on since May between MTN, Africa’s largest 
cellular group, and Bharti, aimed at forging a cellular giant with
 annual revenues of more than $20bn and 200m 

Analysts said the two sides may come out with an agreement
 paving the way for a complex cash and share swap that was first
 announced in May and would give both companies a minority stake in
each other.

But the second broader objective, a full merger of the groups,
 could take much longer, analysts say, especially because of SA worries about preserving the national identity of MTN.

The SA government, which indirectly holds more than 21% in MTN, said earlier this month it was unwilling to
 sacrifice the company’s “SA character” and raised the 
idea of dual listing as a compromise.

But allowing dual-listed companies would involve big changes 
in India’s foreign exchange and stock market laws, something the 
government says cannot be done immediately or to facilitate one
 corporate deal.

The Indian government said Tuesday it had received no request 
for dual listing to be allowed from either Bharti or MTN. “Our officials had some discussions with the SA authorities. They have explained our legal position” on dual 
listing, finance secretary Ashok Chawla told reporters.

The Press Trust of India quoted SA government 
officials as saying they had yet to get a briefing from officials 
who met Indian regulatory authorities last week.

Many analysts said it was difficult to assess the outcome but
 they believed the companies would announce a third extension of the 
talks. “The two parties may come out with preliminary details, which
 may be possible before the end of the month, but there’s no way a 
deal can be concluded,” said investment analyst Rajay Ambekar of
 Prudential SA.

“We’ll most likely see another extension,” Ambekar said earlier.

Indian premier Manmohan Singh met SA President Jacob
 Zuma on the sidelines of the G20 summit of rich and emerging
nations late last week in Pittsburgh to say he supported the deal. Singh said he told Zuma he “sincerely hoped this deal would go

“It has been agreed this matter can be further discussed with 
the government of SA,” he added.

Still, analysts say even if a deal is reached, MTN shareholders
 may not be happy over the price. An agreement would need approval 
from 75% of MTN’s shareholders, some of whom have said the 
offer is too low.  — Sapa-AFP

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