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| SAT to hear Bharti-MTN case appeal on Aug 28 |
| Press Trust of India / Mumbai Aug 11, 2009, 20:21 IST |
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The Securities Appellate Tribunal (SAT) today adjourned till August 28 hearing on an appeal seeking greater clarity on a Sebi order, which exempts South Africa's MTN from making an open offer to shareholders of Bharti, if a merger deal between two telecom companies materialises.
On seeking guidelines on the proposed merger with MTN, Sebi in an order dated June 22 had said that telecom giant MTN need not make an open offer to Bharti shareholders in India as its stake in the domestic mobile company would be through the Global Depository Receipts (GDRs).
Sebi had said that the open offer would only trigger once the GDRs, issued to MTN and its shareholders by Bharti Airtel, are converted into local shares with voting rights.
The appeal was filed by a shareholder Deepak Mehra, who holds around 200 shares, arguing that MTN has to make an open offer to Bharti shareholders.
Bharti and MTN are in exclusive talks till August 31 to create a $23-billion merged entity in a cash and stock transaction.
If successful, the combined wireless group will have more than 200-million subscribers and a combined revenue of $20-billion.
As per the proposal, Bharti would acquire 49 per cent shareholding in MTN and in turn MTN and its shareholders would acquire about 36 per cent economic interest in the Indian firm.
Bharti Airtel had approached the market regulator to grant an exemption to the South African firm from making an open offer in India if the deal materialises.
Sebi, however, did not exempt the company from making disclosures under the Sebi Regulations and the requirements contained therein will have to be complied with.
The current takeover regulations call for an open offer for 20 per cent of a company's shares if a new entity buys 15 per cent of the company's shares.
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