In an article, I’d expressed my wish that I’d prefer Vodafone over Reliance in the Hutch Takeover and the cool part is that, it is true – finally Vodafone have won the Take-Over for the control of Hutchison Essar. This deal is perhaps the largest corporate deal in the Indian market so far. Hutch is India’s 4th largest mobile operator.
Vodafone, the world’s largest mobile phone group by revenue, put in a bid for Hutchison Essar that gave it an enterprise value of ~$19 Billion. It made an indicative offer of $16.5bn for Hutch around Christmas to Hutchison Telecommunications International, which owns 67 per cent of the Indian mobile operator.
The price is good, which reflects the premier position of Hutchison Essar as India’s leading operator. Essar, a conglomerate, that owns 33 per cent of Hutchison-Essar Limited has 21 days time to decide on whether to exercise its RoFR (matching the top bid) or the tag-along right (to sell its 33 per cent stake in the venture). The company’s India operations expects reaching out to 180 million mobile phone users by end-2007, up more than 25 per cent from 143 million now.
The Indian TV Media, right now, is pregnant with the Vodafone acquisition reports everywhere. It is reported that Vodaphone has offered Essar to become a partner firm. The board is evaluating the option and is likely to appear with a decision shortly. “We have been offered by Vodafone to be their partner. We are at the moment evaluating all our options in the best interest of the Group,” said Essar in a statement.