Bharti shares rise on Zain Africa deal hopes

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Bharti shares rise on Zain Africa deal hopes

Shares in Bharti Airtel rose on Monday morning on hopes India's top telecoms firm is heading towards a smooth landing in its USD 9 billion deal talks to buy Kuwaiti telecom Zain's African operations.

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Shares in Bharti Airtel rose on Monday morning on hopes India's top telecoms firm is heading towards a smooth landing in its USD 9 billion deal talks to buy Kuwaiti telecom Zain's African operations.

Bharti said on Sunday it had tied up the entire financing requirement of USD 8.3 billion, with major international banks committing to underwrite the amount, in a sign of progress as the deadline for exclusive talks with expires on Thursday.

Bharti did not say how much interest it was paying for the loans, but banking sources have said the company was getting around 200 basis points over Libor, lower than initial talks of more than 300 basis points.

"The acquisition seems to be on the right track," said Harit Shah, a sector analyst with Karvy Broking.

"But at this level, I won't be comfortable buying this stock. It has risen so much in the last one month. The deal will certainly be EPS dilutive."

By 0436 GMT, Bharti shares were up 1.6% in a weak market, after rising as much as 2.2%, reversing losses made since confirming talks with Zain on February 15.

At its high on Monday, the stock was up 18% since February 16, when it had fallen to its lowest close in more than a year.

The share was the second-worst performer in the 30-stock BSE index in 2009 and was among the only two stocks to have given negative returns even as the benchmark jumped 81%.