Vodafone refuses to pursue MTN bid much to Bharti's relief

12 May 2008

Sunil ''Bharti'' Mittal must be relieved man, now that Arun ''Vodafone'' Sarin has decided not to bid for South Africa's telecommunications operator MTN, in which Bharti is already angling for a majority stake.

A rival bid by Vodafone, even if unsuccessful in acquiring MTN, would certainly have driven up the price Bharti would have to pay for its stake.

Vodafone spokesman Simon Gordon categorically denied his company's intention to pursue a bid for MTN, and reiterated their interest in increasing their current stake in rival operator Vodacom.

Vodafone's interest in MTN was not perfunctory. The UK-based Sunday Times had yesterday reported that  Sarin had instructed his in-house acquisition team, led by former UBS banker Warren Finegold, to examine options to buy the company, before deciding otherwise.

MTN would have been Sarin's biggest acquisition, enhancing Vodafone's exposure to emerging markets, and would have enabled the world's most profitable telecom firm to bypass acquiring a majority stake in Vodacom, its equal joint venture with the South African government owned Telekom, to gain a foothold in Africa.

Sarin has so far been unable to persuade Telekom to allow Vodafone to raise its 50-per cent stake to 85 per cent for £3.5 billion.