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Bharti may rope in EY for the MTN deal

Post a Comment June 26, 2009 – 5:54 am | Permalink |  Print This Post |

Media sources indicate that Bharti Airtel may rope in  Ernst & Young (E&Y) to do a due diligence on South African telecom major MTN, the company with which it is in talks for a complex mutual acquisition of equity to form one of the top telecom conglomerates of the world

MTN is speculated to appoint PricewaterhouseCoopers (PwC) to do a due diligence on Bharti Airtel’s books.

E&Y is likely to be the sole due diligence advisor for Bharti, India’s largest private sector telecom company. Both E&Y and PwC will get access to virtual data rooms and the due diligence is expected to take up to a month.

E&Y had also advised Reliance Communications, when the Anil Ambani-owned Telco was in talks for a merger with MTN last year. At present, E&Y is Bharti Airtel’s auditor.

On Wednesday, MTN held an annual general meeting in Johannesburg, South Africa, but a top company official told that the deal with Bharti was not on the agenda.

MTN holds a 49% stake in MTN Irancell, which has a customer base of over 16 million and whose network cover more than 60% of Iran’s geographical area. Iran is also one of the largest markets for MTN. Bharti shareholders are concerned about the political risk and whether or not the deal will be dilutive, the report said.

With large-scale public protests against the re-election of President Mahmoud Ahmadinejad, the Iranian government has come down heavily on telecom companies and the media. Analysts say that MTN’s revenues from Iran are likely to witness a sharp dip in the current quarter.

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