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Our Bureau

Vodaphone says it won't overpay

New Delhi , Jan. 6

The Honk Kong-based Hutchison Telecom International has asked the Hinduja Group to submit a proposal if it was interested in picking up the stake in Hutchison Essar.

The Hinduja Group had earlier sent an expression of interest to Hutch seeking to know whether the Hong Kong-based company was willing to offload its equity.

"We have received a favourable response from Hutch. They have welcomed our interest and are waiting for our proposal. A decision will be taken by the end of this month," said Mr Gopichand Hinduja, President of the Hinduja Group.

Mr Prabal Banerji, Group President (Finance) and CFO told Business Line that the Hindujas had a good relationship with Hutch from the past. "We have sent them a message reminding them of our understanding that whenever they disinvested they would also give us an opportunity. Our relationship with Hutch has always been very good." Hindujas had earlier sold off their 5.1 per cent stake in Hutchison Essar for about Rs 2,000 crore to Hutchison International.

Meanwhile in the UK, Vodafone said that it would not overpay for picking a stake in Hutchison Essar. A company spokesperson said, "Any acquisition would fit with our published financial mergers and acquisition criteria."

The statement comes in the wake of concerns expressed by analysts and investors that the UK based telecom major may end up paying a huge amount in a highly competitive environment.

Reliance Communication and the Essar Group are the other companies in the fray.

While Malaysia based Maxis may have opted out of the race, Egypt based Orascom is interested in the deal but is awaiting clarity on concerns raised by Indian security agencies.

While Essar has made a formal bid, discussions between Hutch and Vodafone are at a preliminary stage.

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