|
|
South Africa: 'Lucky Numbers' Predict Outcome of MTN, Bharti Deal
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
Business Day (Johannesburg)
16 May 2008
Posted to the web 16 May 2008
Lesley Stones
Johannesburg
SPECULATION about the potential takeover of MTN has switched from how much it would cost when an offer actually materialises to the Indian media turning to superstition to support their theories.
Reuters' Mumbai bureau reported yesterday that anyone betting on when India's largest mobile operator, Bharti Airtel, may firm up its expected take-over bid should look at either tomorrow or May 23.
Superstitions and a liking for auspicious dates make World Telecoms Day tomorrow a potential day for action, while May 23 is apparently a favourite number for Bharti chairman Sunil Mittal. His birthday is on October 23, and 23 features in his driver's licence and cellphone numbers.
"We are a superstitious people, these things matter," said an institutional dealer who asked not to be named. "Even if deals ought to be done in a logical, rational manner, a lot of sentiment and emotion does come into play."
Auspicious dates can influence Indian wedding days, ground-breaking ceremonies or even the buying of jewellery, and Mittal would not be the first businessman to favour a date he considers lucky. Others visit temples and seek the blessing of spiritual gurus before embarking on major initiatives.
In December 2006 Anil Ambani, chairman of the rival Indian operator Reliance Communications, picked his late father's birthday to woo mobile operator Hutchison Essar.
He lost the bid but local markets get excited every year as his father's birthday and the anniversary of his death approach, igniting speculation about acquisitions, launches or bonus share issues from the group.
One popular Indian astrologer known for his comments on corporate deals wrote about Bharti on his website in February, saying: "May 2008 seems very crucial for the company's financial dealings," when it would "make some kind of deal or partnership".
Back on the logical front, numerous theories are taking shape about the form a bid may take -- though neither MTN nor Bharti have officially indicated that their discussions are evolving towards an end-game.
Recurring themes are that even affording a 51% controlling stake in MTN may be a financial stretch for the Indian operator, and that offering MTN investors shares in Bombay-listed Bharti instead may be problematic under SA's foreign exchange regulations. "If I got Bharti shares instead of MTN I'd be contravening foreign exchange controls," said analyst and shareholder Irnest Kaplan.
Analysts estimate that Bharti may value MTN at up to $50bn and say it may seek a merger or a share-swap. Initial reports said Bharti was considering offering R165 per share, with the Asian Wall Street Journal later reporting that the operator was considering raising its potential bid to R175. But MTN's local investors believe R200 should be the absolute minimum, given MTN's proven ability to generate huge revenue and profits as an independent player.
India's Economic Times said Bharti valued MTN at $45bn-$50bn and would offer 60% of a deal in cash and the rest in shares. Other papers put the cash-to-stock ratio at 30:70 or 50:50, showing that while nobody really knows, nobody is afraid to have a guess.
MTN's market capitalisation temporarily reached almost $40bn last week after the two companies finally confirmed that they were in some sort of talks, pushing its shares to the supposed bid value of R165.
Other conflicting reports see Morgan Stanley analysts say it is safe to rule out a 100% acquisition by Bharti, while the Wall Street Journal takes the opposite view and says the talks now centre on a full takeover for a combination of cash and stock.
"We believe it is safe to rule out a 100% acquisition and that a majority stake is the more likely outcome," a report from Morgan Stanley said.
|
Bharti has apparently contacted Middle Eastern funds and banks around the world seeking additional cash to back its expected bid . With Reuters
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
