By Roger Field
Bharti Airtel rumored to be under pressure to increase its offer for MTN as talks continue.
Bharti Airtel and MTN Group have fuelled further speculation that a tie up between the two telecom operators could be agreed by the end of the month, after extending exclusive merger talks until August 31.
In a joint statement, the operators, who are engaged in talks regarding a merger that is estimated to be worth about $23 billion, said: “As discussions between the parties regarding the potential transaction are continuing, both parties have agreed to extend the exclusivity period up to August 31, 2009.”
The statement said that “no decisions or agreement” regarding the merger had been made by the boards of either Bharti Airtel or MTN, and added that the “structure and terms of the potential transaction may be adjusted to reflect further discussions between the parties.”
It is widely thought that the board of Bharti Airtel is under pressure to further appease MTN’s shareholders who claim the offer made by the Indian company undervalues the South African operator.
MTN Group and Bharti Airtel announced that they had restarted merger talks in a statement issued in May 2009. The statement gave details of a potential share swap agreement whereby MTN and its shareholders would acquire a 36% stake in Bharti Airtel, which would in turn acquire a 49% stake in MTN.
A merger between the two companies would create the world’s third largest wireless operator.