HUTCH DEAL

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:

 

[vengabeats]

Vodafone terms Essar a 'natural partner'

New Delhi: Vodafone on Thursday reinstated its willingness to partner Ruias-promoted Essar in the Hutch deal, saying it is the "natural partner" for the biggest acquisition deal in India.


Echoing Wednesday’s comment of its CEO Arun Sarin that ‘he counted the Ruias as good partners’, UK-based telecom giant Vodafone on Thursday offered to align with Ruias' Essar in pursuit of acquiring mobile player Hutch-Essar.


"Essar is a natural partner. It is already there in the joint venture," as quoted by PTI, Sarin told reporters at the close of his two-day visit to India during which he met Cabinet ministers, including P Chidambaram and Dayanidhi Maran.


Keeping his options open to join hands with other firms, Sarin said: "We are talking to several companies... We will see who we can have as partner on a long-term basis".


Asked on the valuation of Hutch Essar that is being pegged at $20-21 billion, he said there was only a certain limit up to which Vodafone would go and "not beyond".


Vodafone was the first player to announce its intention about acquiring Hutch-Essar and Sarin visited Hong Kong recently to meet officials of Hutchison Telecom (HTIL), which owns 67 per cent stake in HEL, before coming to India.


During the meeting with Finance Minister Chidambaram on Wednesday, Sarin is understood to have discussed the company's future plans in India.


After the meeting with Sarin, Commerce and Industry Minister Kamal Nath asked the UK telecom giant to follow best commercial practices in its bid to acquire Hutch-Essar.


"A deal should be done in a transparent manner in accordance with best commercial practices and in the best interest of all stakeholders," Nath told Sarin.


Essar, which presently holds 33 per cent stake in Hutch-Essar, has also expressed its intention to buy remaining 67 per cent stake and Essar Group Chairman Shashi Ruia on Wednesday met Cabinet ministers in this connection.


Apart from terming Essar a natural partner, Vodafone on Thursday kept its option open to partner Reliance Communication to rope in India's fourth largest mobile player Hutch-Essar.


Listing out Vodafone's track record as "good partner", Sarin said he was also open to partnership with other suitors, including Reliance Communications.


Meanwhile, Reliance Communications Chairman Anil Ambani on Thursday met Chidambaram and senior DoT officials as a part of the due diligence process for Hutch-Essar.



Source : IBN

 

[vengabeats]

Rel to raise $1bn, bid for Hutch-Essar

Mumbai: The Board of Reliance Communications, a serious contender for Hutch-Essar is likely to bid for the telecom giant for a whooping one billion US dollars.


According to company sources, Reliance communications authorised its Chairman Anil Ambani to go ahead with the acquisition and raise long-term resources for the deal.


Ambani was given the ‘go ahead’ on Wednesday to take all necessary steps and raise long term resources in the form of External Commercial Borrowings (ECBs), said the company in a statement after its Board meeting.


The Board of Directors also approved the issue of Foreign Currency Convertible Bonds in overseas markets worth up to one billion dollars.


The company however, noted that there was no certainty either on completion or timing of the proposal related to Hutch Essar acquisition.
Source : IBN

 

[vengabeats]

Hindujas still in race for Hutch-Essar

New Delhi: Hutch-Essar bid and the speculation that surrounds evaluating the price for the fourth largest telecommunication giant Hutch Esar by its bidding rivals seems to be reaching no where.


Hinduja Group said on Thursday that it was "very much in the race" to acquire Hutch-Essar.


Reacting to the media reports that Hinduja has pulled out from the race to acquire Hutch-Essar, Hinduja TMT Executive Chairman Ashok Hinduja said, "I am surprised by the spread of this kind of false news that we are withdrawing form the race for acquiring Hutch- Essar."


"We are very much in the race and our due diligence would start on Monday, February 5,” Hinduja said.


"There is no question of withdrawing from the race," he added. The Times had reported that the UK-based Hinduja brothers, who had earlier expressed interest in buying Hutchison Telecom's stake in the Indian venture, are no longer deemed serious bidders.


British telecom firm Vodafone is expected to lodge a formal bid for buying Hutchison Telecom's 67 per cent stake in Hutch-Essar within days.


Besides Hindujas and Vodafone, others in line to acquire Hutchison's 67 per cent stake include Hutch-Essar's Indian partner Essar, Reliance Communications and Maxis of Malaysia.
Source : IBN

 

[vengabeats]

Hutch-Essar bidders take final step

New Delhi: The race to acquire Hutch's stake in Hutch-Essar is hotting up with Hutch asking for the final bids to be submitted on Friday.


It's likely to be a long day for all those in the hunt for Hutch as the initial round of bidding for HTIL's stake in Hutch-Essar is likely to commence on Friday.


Four bidders are likely to participate and while Essar, Vodafone and Reliance Communications are all set to bid on their own, Hindujas are likely to bring a strategic partner on board, either Qatar Telecom or Telecom Italia.


But a Corus type auction is unlikely to be held in the initial round of bidding.


None of the bidders want to let the bid go.


Vodafone is desperate for a stronger presence in India and seems most likely to partner Essar if it comes down to the wire. But it is constrained by the fact that its bid will have to be price sensitive.


For Anil Ambani's Reliance Communications, Hutch makes a lot of strategic sense but regulatory issues could come in the way.


Essar has the right of first refusal and looks keen to have a larger telecom play. But don't be surprised if they sell out.


Hindujas may well be the dark horse. Most analysts ruled them out even before they started due diligence. But they understand telecommunications and look hungry.


Hutch is expected to hold a shareholder's meeting on the February 15 and most bidders expect closure of the deal by the end of this month.



source : IBN

 

[rahul_parab2006]

Hutch-Essar: The dropping bid


The takeover battle for Hutchison-Essar still looks far from settled. The entry of several players in the acquisition arena saw the valuation hitting the roof. But the bid value is likely to get recorrected with some bidders’ having backtracked.

THE CLOSELY WATCHED battle for Hutchison-Essar might end up with the acquirer paying quite less than the much-buoyed valuations of the telecom entity. The presence of such a large number of potential buyers had resulted in skyrocketing valuations. Potential bidders came from all around the globe, with many of them being leading telecom service providers in their respective countries.

Hutchison-Essar is already being valued three times more than its legitimate value at around $18-20 billion by telecom companies. (Telecom companies are valued at 8-9 times their EBITDA value, putting Hutch’s valuation around $5.6 billion). There were also some rumors that one of the bidder’s was willing to pay as high a price as $25.5 billion to completely acquire the telecom entity. Since, initially, a number of players expressed interest in acquiring the company, it isn’t surprising that its valuations has jumped to such mind-boggling figures.

The aspiring bidders came from all around the globe. From India, the interested parties included Anil Ambani’s Reliance Communications; the Ruia-backed Essar group, which already holds 33 per cent stake in the telecom entity and the Hinduja Group. From Europe, came the world’s telecom services leader, Vodafone, with the hope to expand its telecom empire beyond the saturated European markets. From the Middle East, Orascom marked its presence, but after the initial uproar, it has faded out. USA’s telecom giant Verizon and Japan’s number one NTT Group also gave a curious look to the prospect of getting into the world’s fastest-growing telecom market.

Now that the due diligence process is almost over, only three-four companies are being viewed as serious players. Vodafone has already made it clear that it has no plans to pay more than $18 billion for the complete telecom entity. It is highly doubtful that the Vodafone shareholders will approve any decision of the company to fork out an amount greater than $18 billion for this acquisition.

Reliance Communications has recently revealed its plans to expand its wireless and broadband business. It is looking to invest $2.5 billion for the same. Flag Telecom — also a part of ADAG — too, has plans to expand and it seems quite obvious that Anil Ambani would emphasize more on the organic growth of his company than going the inorganic way. But, keeping in mind the ambitious GSM plans of Anil Ambani and a number of foreign PE firms ready to finance this acquisition, RComm still is the favorite in this battle.

The ball game is now centered on only a few players and it seems obvious that we will see some logical valuations for Hutchison-Essar.

 

[rashmik]

Re: Valuation ‘mind-boggling’- Anil Ambaini

hey
ur project is really good. but i need some favour from u as i am preparing a marketing plan on mobile phone (handset ). so plz help me out yaar.
plz reply soon.