Bharti, MTN extend merger talks

Bharti Airtel and MTN have extended their discussions on a €16 billion merger by another month.

The Indian operator and South African mobile operators have pushed back the deadline to August 31, Bharti said in a statement to the Bombay Stock Exchange. Warning of the difficulty in reaching a deal, the statement said the discussions “may or may not lead to any transaction.”

The merger, if successful, would create one of the world’s biggest cellcos, with some 200 million customers and combined sales of more than €13.8  billion in India, the Middle East and Africa.

The two companies called off talks last year over a possible acquisition of 51% of MTN by Bharti. They resumed in May with a proposal restructured to be more politically palatable in South Africa and the 20 other countries in which it will do business.

Under the current offer, Bharti would pay 86 rand ($11.10) plus 0.5 Bharti shares per MTN share, which in turned would to acquire 36% of Bharti.

Anders Ronnebaek, senior portfolio manager at Sydbank A/S, who has MTN in his portfolio, said Bharti should raise its offer, Bloomberg reported. “They should pay more for MTN,” he said. “I would vote no, I wouldn’t tender my shares.”

Bharti is India’s largest cellco by subscribers, and Bharti is Africa’s biggest mobile operator, both with just over 100 million customers.

SingTel, which owns 31% stake of Bharti, is believed to be in favor of the deal and is planning to rebuild its stake in the new entity.