Vodafone submits offer for Hutchison Essar
January 1st, 2007 - Posted in OtherVodafone, the world’s largest mobile phone operator, has submitted an offer for Hutchison Essar of India valuing the company at 17-18 billion dollars, a report has said.
The bid has been submitted to majority shareholder Hutchison Telecom, owned by Hong Kong conglomerate Hutchison Whampoa, the Financial Times reported, citing unnamed sources close to the talks.
The report said at least another two billion dollars could be added as part of extra costs associated with the deal as Vodafone seeks expansion in the world’s fastest-growing mobile market.
However, the talks could be derailed by India’s Essar which owns a 33 percent share in the group, after it offered 11 billion dollars for the remaining stake.
Apart from Vodafone and Essar, the newspaper said Reliance Communications, India’s second-largest wireless operator, was also in the race for Hutchison Essar, the country’s third-largest with 27 million subscribers.
Hutchison Whampoa, headed by Hong Kong tycoon Li Ka-shing, declined to comment on the report.
In Delhi, the Times of India said the Essar Group has offered to sell its stake in Hutchison Essar if Vodafone wins control of the company.
The Essar Group would sell its 33 percent stake through a public offer a year after a Vodafone takeover for at least the price paid by the British company, the newspaper said, citing a source.
Meanwhile, India’s largest private phone company, Bharti Airtel may start “disengagement” talks over a 10 percent stake owned by Vodafone if the Hutchison Essar deal goes through, the Business Standard reported, quoting Bharti Chairman Sunil Mittal.
“Once Vodafone takes a decision (on Hutchison Essar), we will start discussions on disengagement. I can tell you that it will be done in a congenial atmosphere,” Mittal said in the report.
Mittal said his company was not interested in bidding for Hutchison Essar as the price was too high.