Bharti Airtel Tapping Soverign Wealth Funds for MTN Bid
Bharti Airtel is reported to have approached West Asian sovereign wealth funds to finance its possible bid for a majority stake in South Africa's MTN. The Wall Street Journal quoting people close to the situation said Bharti has contacted Middle Eastern sovereign wealth funds for additional cash to back its MTN bid for a majority stake.
"However, there is no agreement yet," the newspaper said quoting one of the unnamed sources. Bharti for its part has reiterated that talks are still at an early stage and that a formal bid for the company has not been made - yet.
"The discussions being held are aimed at combining the strengths of the two leading 'emerging markets' players and accordingly veering towards possible structures to achieve this objective," Bharti said in a statement.
The newspaper noted that Bharti has already secured around US$12 billion in financing from a consortium of banks. Singapore Telecom - which owns 30% of Bharti Airtel - is widely expected to contribute its financial muscle to any purchase bid.
There could be a pricing war though after UAE based Etisalat confirmed that it is interested in acquiring a company in Africa, although reports that Vodafone had run a finger over the finances was denied by the company. Bharti is understood to be pushing MTN into an exclusive negotiating pack so as to block any counter bid from other companies which could push the price up.
Posted to the site on 13th May 2008
