Bharti Airtel denies preliminary pact with MTN pact

Bharti Airtel denied a media report that it had reached a preliminary agreement with South Africa's MTN Group over the US$24bn merger. The report stated that Bharti Airtel was planning to buy a 49% stake in MTN by raising the cash portion of its US$14bn offer. MTN and its shareholders are set to buy a 33% stake in Bharti for about US$10bn, the report stated. The two companies are still in discussions ahead of the September 30 deadline for exclusive talks, Bharti Airtel said. "We would like to categorically deny that any such agreement has been reached between the two companies," Bharti Airtel said in a statement.
Bharti Airtel and MTN have been in merger talks since May for a deal that would create a mobile-services giant with more than 200mn subscribers across Asia, Africa and the Middle East. The proposed US$23bn deal's contours, unveiled in May, involve MTN taking a 25% economic interest in Bharti Airtel for US$2.9bn plus new shares in the South African telco, which is equivalent to 25% of MTN’s existing shares. Besides, MTN shareholders will also get an 11% stake in Bharti Airtel through GDRs that will be listed on the Johannesburg Stock Exchange.
Bharti Airtel will buy 36% of MTN for US$7bn at 86 Rand per share. On an expanded equity base, this will come down to 29%. Bharti Airtel will pick up an additional 20% by subscribing to fresh shares issued by the South African firm.