India’s largest telecom service provider Bharti Airtel and Africa’s largest telecom giant, the South African firm MTN may extend the date for their merger negotiations beyond July 31. Reason: some members of the MTN board are yet to be convinced about the $23 billion two-way deal.
“The talks between Bharti and MTN are moving smoothly in the right direction,” said a highly placed source who didn’t want to be quoted. “The proposed deal has complete support of MTN CEO P.F. Nhleko. A few members of the MTN board are yet to be convinced about the benefits of the deal.”
However, their concerns are being addressed and the due diligence process is near completion, the source said.
“At this stage, MTN has nothing further to add to the further cautionary announcement which was issued to the market. The discussions are still in progress. MTN is in exclusive discussions with Bharti Airtel until 31 July 2009,” an MTN spokesperson told Hindustan Times on email.
“Beyond what we have already communicated in our press note, we have no further comment to offer at the moment,” a Bharti spokesperson said.
The deal is structured in such a manner that MTN and its shareholders would acquire about 36 per cent “economic interest” in Bharti, of which 25 per cent would be held by MTN and the rest by MTN shareholders. Bharti would acquire about 49 per cent in MTN. Last May, talks had broken down as MTN wanted Bharti to become its subsidiary.
{{/usCountry}}The deal is structured in such a manner that MTN and its shareholders would acquire about 36 per cent “economic interest” in Bharti, of which 25 per cent would be held by MTN and the rest by MTN shareholders. Bharti would acquire about 49 per cent in MTN. Last May, talks had broken down as MTN wanted Bharti to become its subsidiary.
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