Shares in India’s top mobile company Bharti Airtel jumped Thursday, a day after it announced merger talks with SA’s MTN aimed at creating an emerging market giant had been called off.
Bharti shares were up 5% at 439,50 rupees in early afternoon after Bharti said talks were over with cellular phone operator MTN while at the same time expressing hope that discussions might be revived.
“There is a window open, they (the talks) may start up again,” said Harit Shah, telecoms analyst at India’s Angel Broking.
The New Delhi-based company’s shares had lagged the overall market amid investor worry about the impact of the estimated US$24bn deal on Bharti’s balance sheet.
But analysts said the deal could be revived despite running aground over worries by the SA government, which indirectly holds 21% of MTN, about preservation of MTN’s ”national character”. MTN is seen as an SA corporate crown jewel.
Bharti, which has large global ambitions, said in a statement late Wednesday, that it hoped SA’s government would ”review its position in the future and allow both companies an opportunity to re-engage”. The collapse of the deal made front-page headlines in Indian newspapers.
“The deal is dead — long live the dream,” said the Economic Times, in a banner headline reference to hopes the talks could be revived.
The collapse of the politically sensitive talks marked the second time the two companies had failed to forge an alliance.
In May 2008, they called off similar discussions to create a cellular giant with $20bn dollars in annual sales and over 200m subscribers from India, the Middle East and Africa.
Bharti blamed the SA government’s rejection of the deal structure for the talks’ collapse, while MTN ascribed the failure to the “economic, legal and regulatory framework” in which both companies function. — Sapa-AFP
