Blackstone, Reliance plan $14bn bid for Hutch
SINGAPORE/BANGALORE: Blackstone Group and Reliance Communications may offer at least $14bn for Hutchison Essar Ltd (Hutch Essar), India’s fourth-biggest mobile phone operator, two people with direct knowledge of the talks said.
Blackstone, manager of the world’s largest buyout fund, and Reliance, India’s second-ranked mobile company, may next week submit a bid to Hong Kong billionaire Li Ka-Shing, 78, and Essar Group, the sources said, declining to be identified before an official announcement. UBS is financing the bid, they said.
The purchase will give Reliance Communications 50mn customers, an increase of 78%, in the world’s fastest-growing mobile phone market. India’s telecommunications industry is forecast to add more than 350mn users by 2010.
“If the bid is successful, then the combination between Reliance and Hutchison Essar would create the single-largest mobile operator in India in terms of subscribers,” said Alexander Chia, associate director at Standard and Poor’s in Kuala Lumpur.
“The market promises high growth rates for many years.”
Hong Kong-based Hutchison Telecoms has been looking to sell telecommunications assets. This month, it completed the sale of its Hong Kong fixed-line business to affiliate Vanda Systems & Communications Holdings, generating HK$1.3bn ($176mn) in one-time gains.
The company has also said it plans to sell shares in its Indian unit in an initial public offering. A sale of Hutch Essar may lead Li’s company to exit the Indian market, where it has been embroiled in a dispute with Essar Group over an attempt to buy some of the Mumbai-based company’s wireless operations.
The Wall Street Journal on December 7 reported that Texas Pacific Group may make an $8bn offer for Li’s stake in Hutch Essar. Carlyle Group and Kohlberg Kravis Roberts & Co are also in talks, the Press Trust of India reported yesterday, without saying where it obtained the information.
“The sort of prices that are floating around don’t make any sense, they are completely speculative,” Hutch Essar managing director Asim Ghosh said on Thursday. “I can’t take such discussion seriously.”
Carlyle’s Washington-based spokesman Chris Ullman was traveling and unavailable for immediate comment. Texas Pacific’s New York-based spokesman Owen Blicksilver and KKR’s New York- based spokeswoman Ruth Pachman declined to comment.
Blackstone and Citigroup are in separate talks with the Indian government to start a $5bn infrastructure fund, Arvind Mayaram, joint secretary at the Ministry of Finance in New Delhi, said today.
Interest in the Indian telecommunications market is increasing, with Citigroup and Providence Equity Partners Inc having this year bought stakes in Idea Cellular Ltd, an Indian mobile-phone operator owned by the Aditya Birla Group.
Only 16.6% of the nation’s 1bn people have either a mobile or fixed-line phone, according to the Telecom Regulatory Authority of India said. A record 6.79mn new mobile phone users were added last month, fuelled by an economy that Credit Suisse forecasts will expand 10% next year, faster than China. – Bloomberg
:tea:
SINGAPORE/BANGALORE: Blackstone Group and Reliance Communications may offer at least $14bn for Hutchison Essar Ltd (Hutch Essar), India’s fourth-biggest mobile phone operator, two people with direct knowledge of the talks said.
Blackstone, manager of the world’s largest buyout fund, and Reliance, India’s second-ranked mobile company, may next week submit a bid to Hong Kong billionaire Li Ka-Shing, 78, and Essar Group, the sources said, declining to be identified before an official announcement. UBS is financing the bid, they said.
The purchase will give Reliance Communications 50mn customers, an increase of 78%, in the world’s fastest-growing mobile phone market. India’s telecommunications industry is forecast to add more than 350mn users by 2010.
“If the bid is successful, then the combination between Reliance and Hutchison Essar would create the single-largest mobile operator in India in terms of subscribers,” said Alexander Chia, associate director at Standard and Poor’s in Kuala Lumpur.
“The market promises high growth rates for many years.”
Hong Kong-based Hutchison Telecoms has been looking to sell telecommunications assets. This month, it completed the sale of its Hong Kong fixed-line business to affiliate Vanda Systems & Communications Holdings, generating HK$1.3bn ($176mn) in one-time gains.
The company has also said it plans to sell shares in its Indian unit in an initial public offering. A sale of Hutch Essar may lead Li’s company to exit the Indian market, where it has been embroiled in a dispute with Essar Group over an attempt to buy some of the Mumbai-based company’s wireless operations.
The Wall Street Journal on December 7 reported that Texas Pacific Group may make an $8bn offer for Li’s stake in Hutch Essar. Carlyle Group and Kohlberg Kravis Roberts & Co are also in talks, the Press Trust of India reported yesterday, without saying where it obtained the information.
“The sort of prices that are floating around don’t make any sense, they are completely speculative,” Hutch Essar managing director Asim Ghosh said on Thursday. “I can’t take such discussion seriously.”
Carlyle’s Washington-based spokesman Chris Ullman was traveling and unavailable for immediate comment. Texas Pacific’s New York-based spokesman Owen Blicksilver and KKR’s New York- based spokeswoman Ruth Pachman declined to comment.
Blackstone and Citigroup are in separate talks with the Indian government to start a $5bn infrastructure fund, Arvind Mayaram, joint secretary at the Ministry of Finance in New Delhi, said today.
Interest in the Indian telecommunications market is increasing, with Citigroup and Providence Equity Partners Inc having this year bought stakes in Idea Cellular Ltd, an Indian mobile-phone operator owned by the Aditya Birla Group.
Only 16.6% of the nation’s 1bn people have either a mobile or fixed-line phone, according to the Telecom Regulatory Authority of India said. A record 6.79mn new mobile phone users were added last month, fuelled by an economy that Credit Suisse forecasts will expand 10% next year, faster than China. – Bloomberg
:tea: