South Africa's MTN may buy a proposed 25 percent stake in Bharti Airtel via Global Depositary Receipts (GDRs) issued by the Indian firm, the Economic Times reported, citing a top Bharti official.
Separately, one banker involved in the deal told Reuters that the GDR route was "only one of the options considered" to avoid an open offer for another 20 percent. Under Indian rules, a stake buy of 15 percent triggers a public offer.
Under the initial proposed deal announced last month, aimed at a merger of the two firms, MTN would take a 25 per cent interest in Bharti for $2.9 billion plus new MTN shares equal to about 25 per cent of its existing shares. MTN shareholders would take another 11 per cent of Bharti.
The companies have said Bharti would buy about 36 per cent of existing MTN shares at 86 rand each, plus half a newly issued Bharti global depositary receipt, to be listed in Johannesburg, for each MTN share.
Bharti would end up with a total 49 per cent stake in MTN in a complex deal.