Mikati clan renews backing to Bharti-MTN merger
30 May 2009
Lebanon's Mikati family, the second largest shareholder in South African telecom major MTN, would back a $23-billion cash and share swap deal with Bharti Airtel under terms unveiled this week, a family member said on Friday.
"We are very much in favour of the deal between MTN and Bharti ... in the future, we believe that the MTN-Bharti deal would lead to a full merger of the two entities," Azim Mikati, chief executive of the family's M1 group, said.
When asked about the current deal structure between the two companies, Mikati said, "We are quite comfortable with the present structure of the deal and we expect the deal to create value for the shareholders.''
Bharti and MTN recently revived merger talks to create what would be the world's third-largest mobile operator by subscriber numbers, with revenue of more than $20 billion, a year after a previous attempt collapsed amid acrimony over who could control a combined entity.
This time, the companies have unveiled the terms of an initial $23 billion cash and share swap that would see Bharti take 49 per cent of MTN, while the South African firm and its shareholders get 36 percent of the Indian firm.
Eyeing cost-savings, access to new markets and the financial muscle that comes with consolidation, the companies want a full merger "as soon as practicable".
The Mikati family has about 10 per cent stake in MTN through M1 group, which is a Lebanon-based entity with interests in diverse sectors including telecom, retail and energy and real estate.
The Mikati family is the first major MTN shareholder to publicly support the deal. Other smaller investors have said they would not vote in favour of the transaction unless the terms are sweetened.
