Financial Daily from THE HINDU group of publications
Thursday, Feb 03, 2005
Mergers & Acquisitions
Info-Tech - Telecommunications
Warburg offloads 3 pc in Bharti Tele 6.27 cr shares sold for Rs 1,355 cr
Mumbai , Feb. 2
PRIVATE equity investor Warburg Pincus has offloaded a 3-per cent stake in Bharti Tele-Ventures Ltd (BTVL), selling over 6.27 crore shares for Rs 1,355 crore or over $308 million to a group of foreign funds.
Warburg, according to market experts, has offloaded the shares at a great profit to itself, the company's overall investment in BTVL being just under $300 million for over 18 per cent stake. This is roughly equivalent to what the firm has tucked away over a single day, they said.
In August 2004, Warburg had sold over 3 per cent stake in BTVL, for more than $200 million.
"The firm continues to hold about 12 per cent of the company's (BTVL's) equity share capital," according to a statement from Warburg Pincus on Wednesday.
The average transaction price was around Rs 217 per share, slightly lower than BTVL's closing price of Rs 219.05 on the BSE on Wednesday. BTVL lost Rs 3.30 or 1.48 per cent on the BSE. This, according to some brokers, happened due to concerns about Warburg Pincus' sale.
The fact that Warburg has obviously made a bumper profit on its investment augurs well for the telecom sector in the country; but there were some apprehensions about the sale too, said a market observer.
However, Warburg Pincus, commenting on the sale, said, "We continue to be a key investor in Bharti and remain confident of the potential and future prospects of the company."
Bulk deal records of the BSE show that the transaction happened largely through two block deals. The transaction was arranged by DSP Merrill Lynch and JM Morgan Stanley.
Ironically, this deal happened on the same day the Government approved an FDI hike in telecom from 49 per cent to 74 per cent.
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