New Delhi: The Board of Britain's telecom giant Vodafone Group Plc is set to meet on Thursday to consider a proposed $13.5 billion-plus offer for Hutchison Essar, said Financial Times in a report.
"Vodafone's Board is set to meet on Thursday to consider a proposed $13.5 billion-plus offer for Hutchison Essar," reported Financial Times.
Although it was not certain that Vodafone Board will decide to make a bid for Hutch-Essar, the British giant has made clear that it was looking for new acquisitions and boost slowing growth in its European businesses by buying assets in emerging markets, a report in The Times said.
Essar group, which holds 33 per cent share in Hutch-Essar, has first right of refusal if Hutchison decides to exit.
Vodafone is world's largest mobile operator in terms of revenue.
The bid would trigger a counter attack from Reliance Communications Ltd (RCL), the second biggest private operator in India.
Hutchison is the fourth-largest wireless operator in India with a 16 per cent market share, behind Bharti's 21.5 per cent, Reliance's 20.4 per cent and state-run Bharat Sanchar Nigam's 16.5 per cent.
Vodafone and Reliance are serious about Hutch-Essar, and there may be plenty of others to come, the Financial Times report said, quoting an unnamed banker familiar to the situation.
However, Bharti Chairman Sunil Mittal has refused an invitation from Vodafone to undertake a joint bid for Hutchison Essar.
Vodafone currently holds 10 per cent stake in Bharti Airtel Ltd.
Bankers told Financial Times that Mittal feared losing control of the main cash cow of his rapidly diversifying group.
The group, which generates most of its revenues from telecom services, has diversified other areas such as retail.
RCL was monitoring developments but had not decided to make a formal bid, reports said. It is believed to have teamed up with four equity houses, including Blackstone.
Some reports said RCL and Blackstone have asked Citigroup and UBS to raise $15 billion to fund their bid.
Foreign ownership restrictions in India prevent Vodafone from directly holding more than 74 per cent of Hutch-Essar. This means it may have to list a minority stake or find an Indian partner for the remaining 26 per cent.
If successful with Hutch-Essar, Vodafone would almost certainly be required to sell its 10 per cent stake in Bharti Airtel, the reports said.
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