Bharti shares may get a fillip
Our Bureau MUMBAI
BHARTI Airtel’s decision to call off negotiations to buy out South African telecom service provider MTN is likely to provide a temporary fillip to the Indian telecom major’s shares. Already, the market appears to have had a whiff of the development on Friday, as Bharti Airtel shares rallied 2.5% in a weak market to close at Rs 836.80. The stock has shed roughly 7% since the company announced on May 6 that it had initiated talks with MTN for acquiring a stake in that company.
Telecom analysts feel that Bharti Airtel shares may gain further on Monday as the concerns about any potential financial burden due to a possible takeover of MTN have subsided. “The markets are likely to react positively to Bharti’s decision as short terms concerns relating to financing the acquisition no longer remain. Of course, the development would affect Bharti’s plan to have an international presence, which could weigh on the stock in the longer term,” says Harit Shah, research analyst, Angel Broking.
Telecom analysts say Bharti would soon be on the look out for an alternative target in some other developing market. These could be any company in Latin America, Africa or South Asia, as part of the company’s plan to have a global footprint. “Past incidents have shown MTN’s inconsistency and this was once again proved. Even as MTN’s reputation would take a setback, it would not affect Bharti’s brand value,” adds Mr Shah.
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