Anil Ambani keen on Hutch''s India phone ops: FT

MUMBAI: Anil Ambani group and U.S. private equity funds are working on a $14 billion-plus bid for the Indian mobile phone operations of Hutchison Telecommunications International, the Financial Times reported on Wednesday.

Analysts said existing shareholders in the business may want a higher price, and raised the possibility of an international bidding war.

Ambani, who controls Reliance Communications Ltd., had previously held talks with Carlyle and Blackstone, and was now in discussions to include Texas Pacific Group, the paper said without identifying it sources.

"We do not comment on market rumours or press reports," Hutchison Telecom spokeswoman Mickey Shiu told Reuters in Hong Kong.

TPG Newbridge declined comment, while a Carlyle Group official could not immediately be reached for comment.

A bid for the Indian assets of Hutchison Essar, which is 67 percent-owned by Hong Kong tycoon Li Ka-shing's Hutchison International, could be worth more than $14 billion, the newspaper said.

CLSA said in a research note earlier this week it estimated Hutchison Essar at an equity value of $14.4 billion.

Economic Times newspaper said on Wednesday that Ambani was in talks with Kohlberg Kravis Roberts & Co. to form a partnership along with Texas Pacific Group and Blackstone.

A spokesman for Reliance Communications declined comment.

GSM GROWTH

A successful bid would boost Reliance's GSM business, which lags its CDMA operations, catapult it to the number one position in India and give it dominance in the lucrative Mumbai market.

Reliance, India's second-biggest mobile services firm, also competes with leader Bharti Airtel Ltd. and state-owned Bharat Sanchar Nigam Ltd.

Hutchison Essar is the fourth-ranked mobile services provider, but enjoys a premium image.

Li's Hutchison Whampoa in November scrapped plans to list the Indian unit after disagreements with Essar over a proposed merger of another mobile operator purchased by Hutchison Essar.

The diversified Essar group has the first right of refusal in the event that Hutchison sells its stake to another telecom firm, according to terms of their agreement, a spokesman said.

Essar could hold out for a bigger valuation, or make a bid for the entire company itself, an analyst said.

"There is rapid growth, particularly in the GSM space, and potential for further growth, so Essar won't let go so easily," said Sumit Modi at Emkay Share & Stock Brokers Ltd.

International operators may also jump into the fray, he said.

The Economic Times said Texas Pacific, along with Malaysia's Maxis Communications, had recently made a bid for Hutchison Essar, but was turned down.

Britain's Vodafone Group Plc, which owns 10 percent of leader Bharti Airtel, has said it is was keen on raising its stake in the firm and increasing its presence in India.

India is the world's fastest growing wireless services market, thanks to cheap call rates and low penetration of mobile facilities. India's mobile subscriber base has topped 136 million, with some six million new users signing up every month.

(Additional reporting Tony Munroe in HONG KONG and Asia Desk)

© Reuters