Written by: Editor
5/28/2009 6:42 AM

Four of MTN's top 25 shareholders would reject a tie-up with Bharti Airtel based on terms unveiled this week and other big investors are unsure about the deal to create a telecoms giant.South Africa's MTN and Bharti have restarted talks aimed at creating the world's third-biggest wireless group with more than 200 million subscribers and combined revenue of $20 billion.Bharti says the potential value of a complex cash and share swap deal is more than $23 billion and could lead to a full merger of the companies, which have a combined market value of almost $58 billion based on current prices.But while many investors applaud the commercial logic of a deal that would give MTN and Bharti access to new high-growth emerging markets, boost their buying power and provide financial muscle for further expansion, several MTN shareholders say they are being short changed."The feeling within the market is that the deal in its current form won't get MTN shareholder approval," said Gavin Joubert, portfolio manager at Coronation Fund Managers, which owns 0.44 per cent of MTN shares and is a top 15 shareholder."One of the issues is that the relative valuation of MTN is significantly cheaper than Bharti Airtel," he added.The deal would see India's leading telecom group end up with 49 per cent in sub-Saharan Africa's biggest operator -- effective control -- while MTN and its shareholders would get around 36 per cent of Bharti.

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