Vodafone may throw its hat in Hutch ring
ET has learnt that the UK-based giant is quietly drawing up plans to throw its hat in the ring for Hutch-Essar.
By TNN |
MUMBAI: As the battle for Hutchison-Essar keeps bankers busy this holiday season, the strange absence of British giant Vodafone from the bidding fray so far has puzzled industry-watchers and deal specialists. The world’s largest wireless operator had grown to its current size and strength largely on the bank of aggressive deals in Europe and elsewhere. As Reliance Communications, Maxis and Essar scour the world for money and tie up with banks and private equity funds, Vodafone’s silence is deafening.
Things, however, may not remain quiet for long. ET has learnt that the UK-based giant is quietly drawing up plans to throw its hat in the ring for Hutch-Essar. Talks are on with bankers and advisors on the strategy to be adopted. The company is also believed to be exploring options of selling its stake in the Bharti group. It is believed that UBS, Vodafone’s house banker, has been asked to explore options of selling its combined 10% stake in Bharti Airtel, the listed company and Bharti Enterprises, the holding company. A Vodafone spokesperson declined to comment.
“We have worked with UBS on a number of transactions over a considerable period of time. We never comment on any speculation as to their involvement in any current project, and we have no comment to make concerning speculation about our 10% holding in Bharti Airtel,” Vodafone’s group media relations director Bobby Leach told ET in an email response from London. Bharti officials were not available for comment and UBS’ country head in Mumbai, Manisha Girotra, did not return calls seeking comment.
Vodafone’s strategy is clear cut. Facing investor wrath over slowing growth in Europe and massive write-offs, the company is selling minority stakes in many markets. It wants to sharpen its focus in big emerging countries where opportunities are huge. On Tuesday, it sold its 25% stake in Swisscom for about $3.5 billion. Last month, it sold almost a similar stake in a Belgian wireless operator to Belgacom and before that had exited companies in both Sweden and Japan. The Japanese transaction was valued at about $16 billion.
In India, Vodafone had purchased 10% in the Bharti group last year in deal worth more than Rs 6,000 crore. About 5% was bought in Bharti Enterprises, the holding company, while the rest was a direct stake in Bharti Airtel, then called Bharti Tele-Ventures.
A sale of the 10% holding is likely to fetch it over Rs 16,000 crore. Bharti Airtel had a market cap of Rs 1,16,000 crore at the close of trade on Tuesday.
Things, however, may not remain quiet for long. ET has learnt that the UK-based giant is quietly drawing up plans to throw its hat in the ring for Hutch-Essar. Talks are on with bankers and advisors on the strategy to be adopted. The company is also believed to be exploring options of selling its stake in the Bharti group. It is believed that UBS, Vodafone’s house banker, has been asked to explore options of selling its combined 10% stake in Bharti Airtel, the listed company and Bharti Enterprises, the holding company. A Vodafone spokesperson declined to comment.
“We have worked with UBS on a number of transactions over a considerable period of time. We never comment on any speculation as to their involvement in any current project, and we have no comment to make concerning speculation about our 10% holding in Bharti Airtel,” Vodafone’s group media relations director Bobby Leach told ET in an email response from London. Bharti officials were not available for comment and UBS’ country head in Mumbai, Manisha Girotra, did not return calls seeking comment.
Vodafone’s strategy is clear cut. Facing investor wrath over slowing growth in Europe and massive write-offs, the company is selling minority stakes in many markets. It wants to sharpen its focus in big emerging countries where opportunities are huge. On Tuesday, it sold its 25% stake in Swisscom for about $3.5 billion. Last month, it sold almost a similar stake in a Belgian wireless operator to Belgacom and before that had exited companies in both Sweden and Japan. The Japanese transaction was valued at about $16 billion.
In India, Vodafone had purchased 10% in the Bharti group last year in deal worth more than Rs 6,000 crore. About 5% was bought in Bharti Enterprises, the holding company, while the rest was a direct stake in Bharti Airtel, then called Bharti Tele-Ventures.
A sale of the 10% holding is likely to fetch it over Rs 16,000 crore. Bharti Airtel had a market cap of Rs 1,16,000 crore at the close of trade on Tuesday.
ADVERTISEMENT
But there is one hurdle that could spoil Vodafone’s plans. The shareholding agreement with Sunil Mittal’s Bharti group has a non-compete clause that bars Vodafone from competing with Bharti for one year after the sale of shares in the Indian company.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
