New Delhi, May 24, 2008: This is further to themedia statements issued by Bharti Airtel Ltd (Bharti). At theinvitation of MTN board, Bharti entered into exploratory discussions onthe possibility of combining the two 'emerging market' telecom giants. A number of structures were discussed and evaluated between the leadbankers on both sides. An in-principle agreement was reached on 16thMay and a term sheet was initialled between the two lead bankers. Thisagreed term sheet was presented to the MTN Board on Wednesday, the 21stof May.
MTN has now presented a completely different structure,from what was agreed. This new structure envisages Bharti Airtelbecoming a subsidiary of MTN and exchange of majority shares of BhartiAirtel held by the Bharti family and Singtel, in exchange for acontrolling stake in MTN. Bharti believes that this convoluted way ofgetting an indirect control of the combined entity would havecompromised the minority shareholders of Bharti Airtel and also wouldnot capture the synergies of a combined entity. Further and moreimportantly, Bharti's vision of transforming itself from a home grownIndian company to a true Indian multinational telecom giant,symbolisingthe pride of India, would have been severely compromised and this wascompletely unacceptable to Bharti. Discussions were on till late lastnight without a breakthrough. Accordingly, Bharti has decided todisengage from the ongoing talks and has conveyed the same to MTN.
Throughoutthe process, the discussions amongst the bankers and the two companieswere cordial and conducted in good faith. The reference price at whichMTN shares were to be transacted was agreed and frozen at the point ofstarting the discussion and Bharti would like to confirm that there wasno further discussion on the share price of MTN, at any point. This isin line with Bharti's highly disciplined approach towards anyacquisition and consistent with Bharti's philosophy that it will notengage in a bidding war at any stage. Bharti would also like to thankover a dozen Internationally reputed bankers from the US and Europe whohave given confident letters of funding of over USD 60 billion.
Bhartiremains keen to expand in the International arena and will continue tolook at opportunities that are consistent with its vision to be a trueIndian company that plays a significant role in transforming global
telecommunications. Bharti Airtel wishes MTN the very best.
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