"Now, MTN chief hints at an European bidder"

But Analysts Say It Could Be A Tactic To Press Bharti For Better Price


THE South African telco MTN, which is discussing a merger with Bharti Airtel, is tempted by opportunities in Asia and wants to play a larger role in the mergers and acquisitions of the Asian telcos without ruling out the possibility of a third bidder, mainly a European one, joining the fray. In an exclusive interview to Wirtschaftswoche, a German magazine, MTN CEO Phuthuma Nhleko said: “We are open to opportunities in Asia. I predict more mergers in future in those countries. And we want at this stage (to) play a role.”

Asked whether any other company, in addition to Bharti, will launch a takeover bid, he did not completely rule out the possibility. He said, “European telecom companies in Africa have a general interest. I, therefore, cannot exclude in the future renowned telecom companies expressing an interest. We are a public company. And there is always the possibility that the shareholders (get) a lucrative takeover bid, without the involvement of the senior management.”

So far, only Etisalat has said it was evaluating a possible bid for MTN. China Mobile had said it was interested in the South African market, but not weighing the option of bidding for MTN. Many analysts said French Telecom could be an interested party. In a recent research report, JPMorgan observed that Saudi Telecom would not let “MTN go without taking a look at the company.” The report said another potential bidder could be Orascom Telecom. The rationale for Orascom is to acquire growth in Africa and re-establish a presence in the Middle-East, it said.

The interview of Mr Nhelko, who has been instrumental in expanding MTN’s operations in 21 countries with 68 million subscribers, was published on Saturday, barely a few days after he had second round of discussions with the top management of Bharti.

He met the Bharti top brass around May 7-8 in London, after both the firms announced that they were in “exploratory talks.” Bharti took this a bit ahead on May 13, saying “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, however, put the cautionary disclaimer: these discussions may or may not lead to any transaction.

However, a section of analysts felt that Nhleko’s ambitions in Asia and his anticipation of an European company bidding for MTN might not gel well. “It could be a tactic to press his asking price through the Bharti management,” said a veteran investment banker.