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Bharti Shares Fall On Worries Over Higher MTN Bid

10 August, 2009

Shares in top Indian telecoms 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 percent.
 
“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 365.50 rupees, their lowest since April 29, before paring some losses to trade down 2.9 percent at 372.75 rupees by 0755 GMT — making them one of the major losers in the broader BSE index, which was up 0.2 percent.
 
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.

 


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Bharti Shares Fall On Worries Over Higher MTN Bid

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