Telecom operator, Bharti Airtel, is shifting its focus on digital as it acquires Warburg Pincus affiliate’s 20% equity share in its DTH arm Bharti Telemedia. The total valuation of this purchase is Rs 31,260 million (Rs 3,126 crore). In a press statement, Bharti Airtel said the total valuation would be discharged primarily via issuance of around Rs 36.47 million equity shares of Airtel at a price of Rs 600 per share and up to Rs 10,378 million will be paid as cash. This new deal is part of Airtel' strategy of aligning the shareholding of all customer-facing businesses. Last week, it was reported that Airtel's Board would meet on February 17 to discuss the entire business revamp. As the meeting concludes, the telco sends out a press note regarding this purchase.
Bharti Airtel Aims at 'One Home' Strategy
Airtel also said that the issuance of shares proposed through preferential allotment is subject to shareholders’ approval. As noted, Bharti Airtel has made this move to align the shareholding of its customer-facing products, services and businesses under the same holding group. The full control and ownership over Bharti Telemedia will allow Airtel to provide differentiated and converged solutions to customers, and it will also allow the telco to promote “One Home” strategy.
Furthermore, Airtel said that it would issue its shares to the Warburg Pincus affiliate at a premium of around 0.50% to the floor price determined as per ICDR regulations. The remaining amount of around Rs 9,378 million will be paid in cash at the time of closing the proposing transaction. Also, there might also be minor customary closing adjustments which will not exceed Rs 1,000 million.
Citigroup Global Markets India Private Limited (Citi) acted as the financial advisor to Airtel and Credit Suisse Securities (India) Private Limited acted as advisors to Warburg Pincus in connection with this transaction.
To recall, in December 2017, a Warburg Pincus affiliate, agreed to acquire 20% equity stake in Bharti Telemedia Limited, the DTH arm of Airtel. Airtel Digital TV is currently the third-largest DTH operator in India sitting behind Tata Sky and Dish TV.