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Zain to cost Airtel $300 mn moreJul 23, 2010 (Mint - McClatchy-Tribune Information Services via COMTEX) -- India's largest mobile phone firm, Bharti Airtel Ltd, will see the cost of acquiring Kuwait-based Zain's Africa assets rise by up to $300 million as it has to make a mandatory open offer for the remaining shares in the Zambia operations. "We have to go ahead with the open offer" to buy out minority shareholders of Zain Zambia under the country's takeover and merger rules, said a senior executive at Bharti Airtel. "The offer is expected to raise Bharti's payout by around $250-300 million," the executive said, requesting anonymity. A company spokesperson confirmed that there would be an open offer. Earlier this year, the company acquired Zain's Africa subsidiaries for $10.7 billion, including $1.7 billion of debt. Bharti has not disclosed the valuation of Zain's operations in individual countries in Africa. The mandatory open offer could result in Bharti increasing its stake in Zain Zambia Plc by another 22% from around 78% now, and a subsequent delisting. Zain Zambia is the only publicly listed entity in the assets acquired by Bharti. "It will be difficult for the Zambian regulator to use any reference price based on the Bharti-Zain transaction. However, the regulator in the past has not been very demanding on prices offered for minorities, especially when a deal involved a large group of international assets above the Zambian listing," Rajiv Sharma, a telecom analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd, wrote in a report. One possibility is that the open offer price would be a 20% premium to the initial public offer (IPO) price, as the Zain Zambia IPO was fairly recent. "This scenario suggests a payout of approximately $210 million," Sharma added. Zain Zambia shares have been suspended from 22 July. To see more of Mint, or to subscribe to the newspaper, go to http://www.livemint.com. Copyright (c) 2010, Mint, New Delhi Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail [email protected], or call 866-280-5210 (outside the United States, call +1 312-222-4544). |