The Hindu Business Line : Hutchison, Essar differ over right of refusal

The Hutchison Essar saga could take a legal turn with the Ruias-promoted Essar saying that they have sought legal opinion on the first right of refusal from noted lawyer, Mr Harish Salve. The Essar move comes after Hutchison Telecom International said that Essar had the first right of refusal only if the deal was signed with an Indian operator. Hutch said that Essar had no say in case the stake was sold to a foreign operator.

Essar, on the other hand, have got an opinion from Mr Salve that the first right of refusal was not selective but across the board, which meant that the Ruias have to give their consent if Hutch sold its equity to any one of the prospective bidders.

As per the opinion given by Mr Salve, there is an `apriori' condition in case it is an Indian buyer, which means Essar will have the first right of refusal before the deal is struck and in case it is a foreign player there is a `post priory' condition, which means Hutch will have to check with Essar only after the deal is done.

Maxis out?

Meanwhile, the number of suitors for Hutchison Essar may have gone down to five with industry sources saying that Malaysia-based Maxis may no longer be interested in the deal. The others left in the fray include Reliance Communications, Vodafone, Essar, Orascom and the Hinduja Group.

Reliance Communication is understood to have received support from four private-equity firms in a bid for the Indian mobile phone operator. The four private-equity companies are Blackstone Group, Apax Partners, Carlyle Group and Kohlberg Kravis Roberts & Co.

In UK, a shareholder of Vodafone has cautioned against overpaying for acquiring Hutchison Essar. The State Street, which holds 1.7 per cent stake in Vodafone, has said that the company must not repeat past mistakes of overpaying in an overheated competitive situation.