Bharati MTN Deal Called off

Bharti Airtel-MTN $ 24 billion deal called off

“Bharti and MTN have decided to disengage from their discussions when the exclusivity period ends on September 30, 2009. This (deal) structure needed an approval from the government of South Africa, which has expressed its inability to accept it in the current form. In view of this, both companies have taken a decision to disengage from discussion.

The announcement pulled down MTN’s shares by 5.5% on the Johannesburg Stock Exchange (JSE) before the South African company requested a suspension of trade in the stock for the rest of the day.

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Source: economictimes
 
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shrey420

Guest
tnx ...........................................for this wonderful information
 

abhijitnaik18

New member
Now, that the deal has canceled.... There was a positive sentiments at "Dallal Street". The Bharathi's price have surged Exponentially and there was close to 4-5% increase in stock value from Previous closing.
Technically Speaking its a good News for the Market. But, only for the Short term!
Coz Soon Bharathi is Eyeing the Latin American Market to Merge with them. Which intern would be a "negative Sentiments" in market!!!http://www.managementparadise.com/forums/images/smilies/SugarwareZ-073.gif
 

Kalpana Heliya

Par 100 posts (V.I.P)
Now, that the deal has canceled.... There was a positive sentiments at "Dallal Street". The Bharathi's price have surged Exponentially and there was close to 4-5% increase in stock value from Previous closing.
Technically Speaking its a good News for the Market. But, only for the Short term!
Coz Soon Bharathi is Eyeing the Latin American Market to Merge with them. Which intern would be a "negative Sentiments" in market!!!http://www.managementparadise.com/forums/images/smilies/SugarwareZ-073.gif

Exactly... as soon as the news was announced.. the BSE Sensex was up 25.61 points, or 0.15%, to 17152.45.

On BSE, 14.52 lakh shares were traded in the counter as against an average daily volume of 9.30 lakh shares in the past one quarter.

The stock hit a high of Rs 467 and a low of Rs 435 so far during the day..

The two groups were not able to conclude a deal within the economic, legal and regulatory framework in which both operated.
 
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shrey420

Guest
tnx for this discussion..............................................i"""'
 

Kalpana Heliya

Par 100 posts (V.I.P)
tnx for this discussion..............................................i"""'

Analyst had predicted Bharti-MTN deal wont work..Few Reasons:


- According to the proposed deal, Bharti decided to buy 49 per cent of MTN through a cash-cum-shares offer totalling about $13.1 billion; MTN would buy 36 per cent of Bharti, with a similar cash-cum-shares offer of around $10.5 billion. At current share and exchange rates, this means Bharti would pay around $7.4 billion in cash, and MTN around $2.9 billion -- leaving around $4.5 billion to be financed through loans.

- With 49 per cent, and with a South African government fretting about retaining MTN's local character, one can be sure Bharti would not have a completely free hand to run MTN as it sees fit. That, however, was the lesser problem. The bigger one was people. No merger anywhere can succeed if the employees of two merging entities do not see themselves as one as The cultures of Bharti and MTN are considerably different, and it is a fair bet that the two companies would have spend at least a couple of years trying to find an alignment of values, either though combo branding (Airtel-MTN) or a completely new one.

- Mergers fail largely because expected synergies take a longer time to deliver, or the price is too high, or there is no one completely in charge. In the Bharti-MTN case, all three applied. First, 49 per cent would not give Bharti unhindered control. Second, paying $4-5 billion in cash means it will take several years to amortise the cost. Third, synergies would not come till the people, culture and branding issues are addressed, and that will take some doing.


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shrey420

Guest
it happens due to the south african govt non supporting attitude they kept on sticked the issue of dual listing which is difficult due to the indian convertibility laws that is why this deal is called off
 
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