Mittal gets nod from key MTN shareholder

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: Bharti Airtel on Friday received support from a critical shareholder in MTN for its bid on the company. Azim Mikati, chief executive of M1 Group, which holds a 9.82% stake in MTN, told a news agency in Singapore that he would support Bharti’s proposal.

“I don’t see the Bharti transaction as a sale. It is really combining two great assets into what could become really a unique player in the emerging markets of the mobile industry,” Mikati said. Mikati said he expected the terms of the deal to be finalised soon.

According to Mikati, M1 saw Bharti as good partner for MTN because of its track record in India. But he declined to comment about the price of the transaction, saying that MTN’s management is leading the discussion with Bharti.

The shareholders have full confidence in the management and are supportive of any decision the management takes, he added. Meanwhile, the broad contours of Sunil Mittal’s ambitious bid for MTN seems to be taking shape. According to industry sources, Sunil Mittal and Phuthuma Nhleko are believed to have worked out an integrated management structure, in concert with the Mikati family, to gain 76% effective control of MTN.

The structure is likely to involve the formation of a special purpose vehicle (SPV) under which the holdings of the Sunil Mittal Group in Bharti, the Mikati family holdings in MTN through M1 and the Phuthuma-controlled Newshelf would form separate subsidiaries. The asset value of the subsidiary would include Mittal’s about 27% Bharti stake and 23% holding of Alpine Trust in MTN, with a combined worth of $20 billion at current stock price.

The SPV is likely to rope in two or three financial investors by diluting up to 24% equity to raise around $5 billion.

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