Hutchison confirms approaches; Vodafone lays cards on the table

22 Dec 2006

Hutchison Telecommunications International Limited (HTIL) has released a statement confirming that it has been approached by various interested parties regarding a possible sale of its equity interests in Hutchison Essar Limited, the company’s mobile operation in India. ‘No agreement in respect of such possible sale has been entered into up to today’s date,’ the release said. ‘The Company reiterates that there is no assurance that a sale may result from these approaches.’

Meanwhile British press are reporting that Vodafone’s board of directors have given chief executive Arun Sarin the go ahead to pursue the takeover of Hutchison Essar. The Daily Telegraph claims a cash offer of up to USD13.5 billion could be on the cards. In a public announcement to London’s stock exchange, Vodafone said that it was ‘considering an acquisition’. ‘The board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutchison Essar,’ said the statement. ‘Such a transaction would be consistent with its stated strategy of seeking selective acquisition opportunities in developing markets.’

Newspapers are also speculating that India’s Reliance Communications (RCOM), the country’s second largest mobile services provider, will also be making a bid for Hutchinson Essar, but will wait for Vodafone to make the first move. RCOM is rumoured to be teaming up with US private equity firm Blackstone in a bid for its competitor.