New Delhi: India's largest private telecom company Bharti Airtel on Saturday pulled out of negotiation for acquiring an estimated $45-50 billion MTN, saying the South African telecom entity deviated from agreed terms.
"An in-principle agreement was reached on 16th May and a term sheet was initialled between two lead bankers... MTN has now presented a completely different structure, from what was agreed," Bharti said in a statement.
The new structure envisaged Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Indian company held by Sunil Mittal, promoter of Bharti, family and its foreign partner Singtel, in exchange for a controlling stake in MTN.
"Bharti believes that this convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity," the company said.
Both (Bharti and MTN) had initiated talks about three weeks ago and talks were cordial through out this period and conducted in good faith.
Bharti also claimed that over a dozen internationally reputed bankers from the US and Europe of having pledged funds of over 60 billion dollars for the acquisition.
The reference point at which MTN shares were to be transacted was agreed and frozen at the point of starting the discussion and Bharti would like to confirm that there was no further discussion on the share price of MTN, at any point.
Bharti also said that the company would continue to explore possibilities to expand its presence in the overseas market.
By accepting the deviated structure from MTN, Bharti's vision of transforming itself from a home grown Indian company to a true multinational telecom giant, symbolising the pride of India, would have been severely compromised and this was completely "unacceptable" to Bharti, the statement said.
Discussions were on till late last night without a breakthrough, the company said, adding, "Bharti has decided to disengage from the ongoing talks and has conveyed the same to MTN."
It was at an invitation of MTN Board, Bharti had entered into exploratory discussion on the possibility of combining the two "emerging market" telecom giants, Bharti said and wished MTN the very best in the future.
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