Reliance Communications (RComm), the flagship company of Indian billionaire Anil Ambani, now in talks with South Africa-based MTN, is looking to buy more than 40% stake in the telecom major.
According to reports, Anil Ambani is looking for ways to increase his in-effect controlling position in the South African firm by seeking to persuade the South African mobile operator’s shareholders to waive their right to a tender offer.
It has been reported that Ambani would limit himself to a 34.9% stake in MTN, because if it went higher, then he would be required as per the South African laws to make an offer to buyout the other shareholders of the telecom major. However, Ambani seems to be looking at the case for a whitewash procedure under which MTN’s shareholders would vote on whether to waive their right to a tender offer. If the shareholders agree, Ambani may end up owing 40-45% of MTN.
According to reports, Ambani is seeking to engineer a de facto takeover of MTN under which he would swap most of his 66% shareholding in RComm for a near-controlling stake in the merged entity. MTN’s largest shareholders are Newshelf, a company that holds 13 per cent on behalf of the group’s staff, and Public Investment Corporation, a South African state-owned pension fund, which also has 13%, “the report said.
The next largest shareholder in the South African firm is M1, a company that holds almost 10% on behalf of Lebanon’s Mikati family. However, the precise size of Ambani’s share in MTN would be influenced by the take up of an expected tender offer by the African firm to RComm’s minority shareholders.