Vodafone board meets today to decide on Hutchison Essar acquisition
21 December 2006
According to a report in today''s Financial Times, the board of Vodafone is meeting today to consider making a $13.5 billion-plus offer for Hutchison Essar, the fourth biggest mobile operator in India. Vodafone is the world''s leading mobile services operator in terms of revenue.
Meanwhile according to some reports, Ravi Ruia is in London amidst speculation to meet the Vodafone management to strike a deal. Ruia has been meeting financial investors to ascertain their interest in Hutch-Essar.
But it is not clear whether Essar intends to sell its stake or line up finances to buy out Hutchison''s stake in Hutchison Essar. In the event of Hutchison selling its stake, Essar would have the first right of refusal.
The paper also said that Vodafone''s move to acquire the 67-per cent shareholding of Hutchison Telecom International Ltd (HTIL) is likely to set-of a bidding war with Anil Ambani''s Reliance Communications, which has evinced interest in acquiring the entire joint venture and not merely 67-per cent stake held by Hutchison Telecom International (HTIL).
The Financial Times says Vodafone executives plan to table an offer in person on Friday to Canning Fok, managing director of Hutchison Whampoa, and Ravi Ruia, vice-chairman of Essar, who are both scheduled to be in London.
Hutchison and Essar have been involved in a dispute over a 20-per cent stake sale in HTIL to Egyptian telecom company Orascom, which gives Orascom a 10-per cent beneficial stake in Hutchison Essar. Essar had objected to this.