Maxis readies to woo Hutch Essar

By siliconindia   |   Thursday, 21 December 2006, 06:00 Hrs
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NEW DELHI: Maxis of Malaysia is finalizing a bid for Hutchison Essar, the third largest private mobile operator in India, creating, in effect, serious competition for the Anil Dhirubhai Ambani group. The Maxis bid lays out a couple of options towards wooing the telecom service provider. While on one hand it has the option of buying Hutchison’s 49 per cent stake in Hutchison Telecommunications International Ltd (Orascom owns another 19 per cent and the remaining stock is widely held) on the other hand, it can also directly acquire HTIL’s 67 percent stake (with its associates) in Hutchison Essar. Maxis representatives have declined to comment. Maxis, incidentally, is the third serious suitor for Hutchison Essar after bids from the Anil Dhirubhai Ambani Group and European telecom major Vodafone. An acquisition will give the successful bidder a strong footprint in India, the world’s fastest growing mobile market. Maxis already has a presence in the Indian market through its buyout of Aircel, which operates mobile services in seven circles, and is now looking for a pan-India launch. Meanwhile, Vodafone is likely to call a board meeting soon to discuss its bid for Hutchison Essar. Its stock today moved up by 1.04 per cent after news broke that it might join the race. Adding fuel to fire was the fact that Ravi Ruia of the Essar group is also learnt to be camping in London. Sources in the know said Vodafone was interested in picking up only the HTIL stake in Hutchison Essar, and would want to operate the company with the Ruias. The sources further disclosed that Vodafone had had several rounds of discussion with Bharti Airtel honcho Sunil Mittal, in which it had a 10 per cent equity stake, for making a joint bid for Hutchison Essar and later merging the two entities. The talks, however, are believed to have failed on account of regulatory issues and the possibility of the Mittal equity falling very low in case of a merger. As a result, Vodafone had decided to go it alone. If the Hutchison deal fructifies, Vodafone could sell its stake in Bharti Airtel, given that it would have a larger stake in another mobile operator in India.