By IANS,
New Delhi : Bharti Airtel and South Africa’s MTN Thursday said they were extending their talks for a proposed $23-billion financial alliance till Sep 30, with no final pact in sight even as the revised deadline of Aug 31 approaches.
“Discussions between the parties regarding the potential transaction continue to progress satisfactorily and the parties have accordingly agreed to extend the exclusivity period until September 30, 2009,” Bharti Airtel said in a regulatory statement to the Bombay Stock Exchange (BSE).
The company also said no decision had been made to acquire any shares and the discussions may not lead to any transaction.
Bharti proposes to buy 36 percent of the South African company by offering shareholders half a Bharti share, whereas MTN will get a 25 percent stake in Bharti for $2.9 billion and through issuing new shares equal to 25 percent of its share capital.
The potential transaction between the two companies is proposed to create a leading telecom service provider group, aligning Bharti’s market-leading Indian business with MTN’s growing African and Middle Eastern operations.
Telecom sector trackers didn’t see anything amiss in the extension of talks, maintaining that the process was taking time.
“It’s just that the process is taking a longer time but I have no reason to believe there are any hiccups,” said Mahesh Uppal, director of telecom consulting firm Com First.
Singapore Telecom, a major existing shareholder of Bharti, will continue to be a strategic partner and hold significant stake after the implementation of the potential transaction.
Bharti had ended talks with MTN last year, rejecting the proposal that would have made the Indian firm a subsidiary of MTN. Following that, the South African group started negotiations with the Reliance Anil Dhirubhai Ambani Group, which also failed.
However, Bharti and MTN started negotiations again May 25 this year to forge an alliance that would make it the biggest deal ever in the industry.
Earlier this month, the market regulator had permitted Airtel and MTN to go ahead with their proposal to buy each other’s shares in a $23-billion deal without the latter having to make an open offer in Indian equities markets.
Both Bharti and MTN have over 100 million subscribers and the deal will make the combined entity among the top five telecom service companies in the world, with annual revenues of $20 billion.