Vodafone to start due diligence on Hutch Essar, papers say

8 Jan 2007

Vodafone Group is to begin due diligence on Indian mobile carrier Hutchison Essar today, British newspapers report, after executives from the firm met government officials last week. An Indian telecom ministry official said on Monday that Vodafone officials met ministry representatives last week, although they did not meet Telecom Minister Dayanidhi Maran. Indian newspapers said Vodafone executives were scheduled to meet Minister Maran later this week. The Financial Times reports that due diligence on Hutchison Essar, India’s fourth largest mobile phone service operator, was denied to other potential bidders including Essar and Reliance Communications.

By allowing the British firm de facto exclusivity to pursue a deal, Hutchison Whampoa, the Hong Kong group that indirectly owns 67% of Hutchison Essar, is effectively burning its bridges with Essar, the minority shareholder. Essar has already made clear its desire to buy the two-thirds of the mobile phone company it does not already own. The FT now believes Essar is ‘almost certain to go to court to try to enforce its interpretation of a disputed shareholder agreement with Hutchison’. Hutchison and Essar are scheduled to hold another round of talks this week in Hong Kong to ‘resolve their differences’ and prevent the matter from going to court, India’s Economic Times said.

India, Vodafone Group, Vodafone India