Corus-style auction likely for Hutch-Essar, says Hindustan Times
07 February 2007
According to a report in the Hindustan Times, Hong Kong-based Hutchison may sell its stake in Hutchison Essar Ltd. through an open auction with a minimum reserve price of around $14 billion.
The report says the auction would be similar to that used for the sale of UK-based steel maker Corus.The fixing of the minimum reserve price would help weed out bidders who are not serious about the acquisition.
The UK-based Vodafone Group Plc, Reliance Communications Ltd., Hutchison's JV partner the Essar Group, which owns the remaining 33-per cent stake, and Hinduja group are in the fray against each other to buy Hutchison's 67-per cent stake in Hutchison-Essar.
Vodafone and Reliance Communications are regarded as front-runners for Hutchison Telecom's stake in Hutchison Essar.
Hutchison Whampoa's valuation of $14 billion for its 67-per cent stake in Hutch-Essar, values the company at approximately $20 billion.
Hutchison Essar is India's fourth-largest mobile phone service provider and the paper said its enterprise value would be around $18-$20 billion including debt of $1 billion.