Maxis readies bid for Hutch Essar

After Vodafone, more competition for Anil Ambani.

Posing serious competition to the Anil Dhirubhai Ambani group, Maxis of Malaysia is finalising a bid for Hutchison Essar, the third largest private mobile operator in India.

The Maxis bid has the option of buying Hutchison's 49 per cent stake in Hutchison Telecommunications International Ltd (Orascom owns another 19 per cent and the remaining stock is widely held) or directly acquiring HTIL's 67 per cent stake (with its associates) in Hutchison Essar. Maxis representatives have declined to comment.

After the Anil Dhirubhai Ambani Group and European telecom major Vodafone, Maxis is the third serious suitor for Hutchison Essar. An acquisition will give the successful bidder a strong footprint in India, the world's fastest growing mobile market.

Maxis already has a presence in India after it bought Aircel, which operates mobile services in Tamil Nadu and Chennai, apart from five other circles, and is now looking for a pan-India launch.

Meanwhile, the Vodafone stock today moved up by 1.04 per cent on the bourses after news broke that it might join the race for Hutchison Essar. Vodafone is likely to call a board meeting soon to discuss the matter. Ravi Ruia of the Essar group is also learnt to be camping in London.

While Vodafone said it would not comment on speculation, sources in the know said it was interested in picking up only the HTIL stake in Hutchison Essar, and would want to operate the company with the Ruias.

They also disclosed that Vodafone had had months of discussion with Sunil Mittal of Bharti Airtel, in which it had a 10 per cent equity stake, for making a joint bid for Hutchison Essar and perhaps later merging the two entities.

However, the talks were believed to have failed on account of regulatory issues and the possibility of the Mittal equity falling very low in case of a merger. As a result, merchant bankers said, Vodafone had decided to go it alone.

If the deal fructifies, Vodafone sources said, the company could sell its stake in Bharti Airtel, given that it would have a larger stake in another mobile operator in the country.

On his part, Mittal denied that there was any move by the two companies to jointly buy into Hutchison Essar. He said he was unaware of Vodafone's plan for Hutchison, adding that Bharti was not interested in any bid.