Hutchison Telecom to discuss India bid interest

Hong Kong, Jan 29: The board of Hutchison Telecom was to discuss the bid interest in its 67 percent stake in Indian mobile carrier Hutchison Essar at a meeting on Monday afternoon in Hong Kong, a person familiar with the situation said.

Britain's Vodafone Group Plc, India's Reliance Communications, the Hinduja group and Hutchison Telecommunications International Ltd's joint venture partner, the Essar group, are all in the running to buy the controlling stake in Hutchison Essar.

Hutchison Essar, India's fourth-largest cellular carrier, has been valued at as much as US billion, a price tag that analysts have said was expensive. Its suitors are drawn by a mobile phone market that is the world's fastest growing.

Vodafone, which has a 10 percent stake in top Indian operator Bharti Airtel, is keen to ratchet up its presence in the country.

Reliance, which is already India's No. 2 cell phone operator, would leapfrog into first place if it were to win the bidding for Hutchison Essar.

Hutchison Telecom is controlled by Hong Kong conglomerate Hutchison Whampoa Ltd. Both declined to comment.

Hutchison Telecom's India arm drew takeover interest when its plan to list Hutchison Essar fell apart in November over disagreements between the two joint venture partners.

Hutchison and Essar have subsequently disagreed over Essar's rights of first refusal in the event that Hutchison sells.

While Hutchison is believed to be happy to keep its India stake, Hutchison Whampoa Chairman Li Ka-shing is famous for trading assets at the right time.

''If they sell Hutchison Essar, they'll make a huge profit.

The selling price will be way above their market cap. If they sell, the share price will shoot up,'' said Francis Lun, general manager at Fulbright Securities.

Shares in Hutchison Telecom have risen 23 percent since the start of November and were unchanged on Monday at HK.50. The company, which operates networks in several markets including Hong Kong, Israel, Thailand and Ghana, has a market value of about US.3 billion.

Egypt's Orascom Telecom, which holds a 19 percent stake in Hutchison Telecom, told Reuters last week that it had not ruled out joining the battle for Hutchison Essar, but also said that if it did so it would probably look to buy Hutchison Telecom.

It also said it would consider selling its Hutchison Telecom stake.

(US$=HK.8) REUTERS