"The share prices of Bharti Airtel have been slid this month after the news of the possible merger broke out in the media. One of the major reasons for the fall in prices is that the shareholders feared that the company might have bought MTN at a premium of 20-25 per cent," a analyst with a top brokerage firm, requesting anonymity, told Business Standard.
On May 24, the shares of Bharti Airtel fell 6.87 per cent to Rs 836.80 from Rs 898.60 on May 2 (May 1 was a holiday), according to data available on the Bombay Stock Exchange. The news of Bharti Airtel's interest in MTN was first reported on May 1. In April, the stock hovered around Rs 900.
The stock continued to decline in May with share prices touching Rs 856.20 on May 15 and sliding further on May 20 to Rs 828.75. On May 21, the stock tumbled to Rs 817.60. However, the stock recovered to Rs 836.80 at the end of the week.
The fall in prices was also attributed to a fear of Bharti Airtel increasing the offer price depending on the bids put in by others and sourcing of debt to pay the money.
Now with the deal being called off, shareholders expect the company to use the cash available with it (discounting borrowings) for expansion activities, including network and services, in India.
