The race for acquiring majority interest in Indian telecom major Hutch-Essar is going to get fiercer with Vodafone set to submit a formal bid next month, even as the Hindujas began their due diligence process on Friday.
"Our due diligence process is currently underway. Once we get the report, which could be any time next week, we'll be submitting a formal proposal. It will be sometime early next month," Vodafonne chief executive Arun Sarin said.
"Yes, the entry of so many players has pushed up valuations. But we're serious," the Indian-born alumnus of the Indian Institute of Technology (IIT), Kharagpur said on the margins of the World Economic Forum (WEF) meetings.
Anil Ambani's Reliance Communications, the Hinduja group and Russia's Altimo are among those interested in acquiring the 67 percent stake that the Hong Kong-based Hutchinson Whampoa has in Hutch-Essar.
Sarin said Hutch-Essar was an exciting prospect for Vodafone even if it means an aggressive bid to get a foothold in one of the fastest growing economies in the world, especially in the telecom market space.
The Vodafone chief executive, who has already had been authorised by the company board to take steps as he deems fit on the Hutch-Essar takeover bid, said he has not spoken yet on offloading stake in Bharti group's telecom venture.
Vodafone has a little under 10-percent stake in Bharti group's telecommunication venture and will need a nod from the company before acquiring a stake in rival Hutch-Essar. "We will talk about that when the issue arises. For the moment, Sunil's told us he is quite open," Sarin said, referring to his informal conversations with the chairman of the Bhati Group, Sunil Bharti Mittal.
"But we have no problems with. Vodaphone has aspirations of running a telecom business in India and having some management say. But that is not available in the Bharti group," said Mittal. "So we have no problems if they look elsewhere," added Mittal, who was on Friday named for the Padma Bhushan award and is among the four co-chairs at the WEF's ongoing annual meeting.
He, however, said there were no official talks as yet. The board of Bharti, in fact, also appreciated the fact that Vodafone officials chose to abstain from participating at their board meeting in view of their plans for in a rival firm.
Even Prakash P Hinduja, who met with this correspondent on the sidelines of the WEF meeting, said his group was keen on Hutch-Essar. "We are serious. That's why we entered the fray," Hinduja said, adding the due diligence process had started.
Incidentally, the Hindujas had exited Hutch-Essar last June by selling their 5.11 per cent-stake for $450 million.