London, Dec 22: Telecom giant Vodafone's board of
directors has mandated chief executive Arun Sarin to pursue a
cash offer for India's fourth-largest mobile firm Hutchison
Essar, a British media report said Friday.
"Vodafone's board has given its chief executive Arun
Sarin the go-ahead to pursue a cash offer for Hutchison Essar,
which would value India's fourth mobile operator at up to 13.5
billion dollars (7 billion pound)," 'The Daily Telegraph' said.
The daily also said that any bid is believed to be
dependent on whether Vodafone manages to convince Bharti
Airtel, India's largest mobile operator where it already has
10 per cent stake, to waive a one-year non-compete clause.
Vodafone's 10 per cent stake in Bharti Airtel is worth
around 1.4 billion pounds, it said.
"An announcement on whether Vodafone will proceed with
efforts to buy out Hutchison Essar's 67 per cent shareholder
Hutchison Whampoa of Hong Kong could come as early as this
morning," the report said, without citing any source.
The report said Vodafone has been trying to get an
agreement in principle from Bharti Airtel's larger
shareholders, Bharti Telecom and Singapore Telecom, to drop
the non-competition clause for a penalty fee.
Besides Vodafone, India's Reliance Communications and
Malaysia's Maxis are reported to be interested in acquiring
Hutch Essar. However, none of them have acknowledged that they
would like to bid for Hutch Essar, nor has there been any
formal bid by any of the players.
Hong Kong-based Hutchison Telecom International Ltd has
67 per cent stake in the joint venture, while India's Essar
has the remaining 33 per cent.