Reliance Communications and MTN may swap shares

South Africa's MTN Group and Reliance Communications are discussing a possible combination, just days after India's top mobile firm Bharti Airtel ended talks with MTN after failing to agree how to structure a deal.The Two companies may swap shares or take big stakes in a new company as regulatory hurdles and both firms' global ambitions seem to rule out a $66 billion emerging markets telecoms merger.

Analysts said Reliance Communications' chairman, Anil Ambani, who owns two-thirds of India's No.2 mobile operator,like Bharti Airtel would also not want to cede control, casting doubt on media reports that MTN, valued at around $38 billion, planned a reverse takeover of Reliance, which has a market value of about $28 billion.

The two firms might transfer shares to a separate entity in which they would both hold significant stakes, or swap shares in a way to get around potential regulatory hurdles.MTN could take a stake of below 15 percent in Reliance Communications, avoiding having to make an open offer for a further 20 percent, and Reliance could take a minority stake in MTN that avoids regulatory triggers.

Read more in The Economic Times article.

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RCom, MTN in exclusive talks over merger
Bharti may rope in SingTel for MTN buy

RCom, MTN in exclusive talks over merger

Anil Ambani group company Reliance Communications on Monday announced entering into an exclusive negotiations with South Africa's telecom giant MTN to discuss potential combination of their businesses.

The development comes just two days after South African company deviated from agreed terms with India's largest telecom player Bharti Airtel, who pulled out of 3-week long negotiations.The two companies have agreed for a 45-day exclusivity to work out the details for merging their businesses.

If the negotiations are successful, the combination of MTN and Reliance Communications would create a global wireless juggernaut, larger even than developed-market giants such as AT&T.

Last week, Bharti Airtel had decided to pull out as MTN had proposed a structure which would have made the Indian telecom giant a subsidiary of South African company, contrary to the agreed terms between the two firms prior to entering the discussions.

Read more in The Economic Times article.

Reliance Comm buys UK's Vanco for $77 mn

Reliance Communications Ltd, India's No.2 mobile operator, said today that its Reliance Globalcom unit has bought UK-based global managed network services provider Vanco for $77 million.

Reliance Communications, which earlier on Monday said it had started exclusive talks with South Africa's MTN Group that could create a $63 billion telecoms giant, said the acquisition of Vanco would add $365 million in annual revenue.

Reliance Globalcom will pay $76.9 million for "100 percent equity of Vanco Group free of debt",.

Two European bids in MTN fray

The race for South African telecom major MTN Group is hotting up with the possibility of two other players evaluating a bid or a strategic relationship with the company. Banking sources say European telecom major Deutsche Telekom and Russian telco Vimpel Communications are also studying the possibility of talking to the MTN Group.

With over 50 million customers, Vimpel Communications has a market capitalisation of $42.5 billion, which is similar to MTN. The company operates in various markets in Russia and the CIS countries, which include Kazakhstan, Ukraine, Georgia, and Armenia, amongst others, under the "Beeline" brand name.Deutsche Telekom has over 106 million mobile customers and operates in Germany, the US, the UK, Austria and the Netherlands, amongst others. It has a market capitalisation of $74 billion.

Read more in The Business Standard article.

Bharti Airtel, SingTel to float SPV for MTN

Billionaire Sunil Mittal, the founder of Bharti Airtel, plans to set up a separate company in partnership with Singapore Telecommunications (SingTel) that will be the vehicle for acquisition of the South Africa-based MTN Group.

The special purpose vehicle (SPV) will raise funds, including bridge loans. The company will later explore the option of selling American depository receipts (ADRs) or global depository receipts (GDRs) to repay the bridge loan.The SPV may be registered in a tax-haven country, like Mauritius or Bahamas.

The move to float an SPV will help Bharti Airtel to continue being listed on Indian stock exchanges, while MTN's promoters will be given a stake in the SPV. The quantum of the stake will depend on the cash-share ratio, which is yet to be finalised between Bharti and MTN. Bharti Airtel would raise funds by diluting the equity of the SPV and, if needed, the promoters' stake in Bharti and that of its partner SingTel to part-finance the deal.

Read more in The Business Standard article.

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Bharti, MTN in talks for 50:50 cash-share deal
Bharti may rope in SingTel for MTN buy

Bharti, MTN in talks for 50:50 cash-share deal

The top managements of Bharti Airtel and South African telco MTN Group and the Lebanon-based Mikati family (which holds 9.8 per cent) are looking at a 50-50 cash-and-stock deal option as part of possible merger talks against an earlier 60:40 structure.

Banking sources said with the MTN shareholders asking for a higher price than what Bharti had initially offered, the Indian telecom company might now pay 50 per cent of the money in cash and the rest through shares in Bharti Airtel.

MTN is also believed not to favour signing an "exclusivity" contract with Bharti Airtel under which it would be bound not to talk to any other competing bidder till the negotiations with them have been concluded.Issues relating to who will be the chairman of the merged entity — Bharti's Sunil Mittal or MTN group Chairman M C Ramaphosa — are also under discussions.

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Bharti may rope in SingTel for MTN buy

Bharti seeks Middle East funds for MTN bid

Bharti seeks Middle East funds for MTN bid

Leading mobile operator Bharti Airtel Ltd has contacted Middle Eastern sovereign wealth funds in a search for additional cash to back a bid for a majority stake in South Africa's MTN Group Ltd, a media report said on Tuesday, citing people familiar with the situation.

However, there is no agreement yet, the report said. Bharti, which has said it is in talks with MTN but has not yet made any bid, is reported to be considering offering 160-165 rand a share for a 51 per cent stake in MTN that would cost $19 billion.

A person familiar with the talks said that late last week that Bharti may raise that to 175 rand per share. The sources have said that Bharti has already negotiated about $12 billion in financing from a group of banks that includes Standard Chartered PLC.

Read more in The Economic Times article.

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Bharti may rope in SingTel for MTN buy
SingTel involved in Bharti-MTN bid talks

SingTel involved in Bharti-MTN bid talks

Singapore Telecommunications Ltd is actively involved in the takeover talks between India's top mobile firm Bharti Airtel Ltd and South African operator MTN Group Ltd, a source familiar with the situation said on Monday.

However according to sources it was premature to speculate if SingTel -- which is Bharti's largest shareholder with over a 30 percent stake -- would provide any form of financial support to Bharti for the bid as the deal was evolving.

SingTel, Southeast Asia's largest phone company, declined to comment.Bharti also said in a separate statement it had not made any offer to buy the whole or part of MTN.

The Asian Wall Street Journal, quoting an unidentified source, said on Monday that Bharti was considering raising its offer to around 175 South African rand ($22.63) a share for control of MTN, and an official bid could come this week.

Read more in The Economic Times article

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MTN sets terms for deal with Bharti
Bharti may rope in SingTel for MTN buy


Also read related story in The Economic Times article.

MTN sets terms for deal with Bharti

Negotiations between the top management of Bharti and MTN are entering a crucial phase. MTN, it is learnt, has put forth a condition that the South African telco’s CEO and group president, Phuthuma Nhleko should be the chief executive of an integrated management committee, combining top executives of both the firms, in case the Indian company manages to emerge as the acquirer.

The discussion on an integrated management committee signals that top honchos of MTN, including Mr Nhleko, could be interested in acquiring shares of Bharti Airtel. The MTN management, including Mr Nhleko, holds 13% stake in the company.

Bharti’s plan to acquire a majority stake might cost it over $20 billion, going by MTN’s market capitalisation of $40 billion. Bharti has commitments from Standard Chartered Bank and Goldman Sachs for loans of $12 billion. Other banks may join the consortium as the discussions progress.

Read more in The Economic Times article.

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Bharti may rope in SingTel for MTN buy

Bharti may rope in SingTel for MTN buy

India's largest private telecom company Bharti Airtel is believed to have held discussions to rope in Singapore Telecommunications Ltd (SingTel), which directly and indirectly holds 30.5 per cent in the company, to bid for South African telecom major MTN Group.

MTN's largest shareholder with 23 per cent is the Alpine Trust, which is controlled, in turn, by two shareholders that have pooled their shares in the trust.One is Newshelf664, a company floated by MTN staff and management and the other is M1, controlled by the Makati family. The other major shareholder is PIC, a South African government-owned pension fund, which has 13.5 per cent. The rest of the shareholding is widely dispersed.MTN is listed on the Johannesburg stock exchange.

An initial entry in the company might be through the buyout of the Alpine Trust stake. Alpine has a market capitalisation of around $33 billion. If Bharti considers buying 51 per cent, the bill will be over $20 billion (Rs 80,000 crore).Goldman Sachs is believed to have agreed to provide debt of up to $12 billion, while the remaining will be taken care of by Stanchart by issuing Bharti's equity to MTN shareholders.