South African mobile group MTN has asked Bharti Airtel to raise its merger price by another $1 billion, the WSJ has reported.
The two carriers have been in talks for more than two months on a $23 billion merger and recently extended the exclusivity period until the end of August.
But a source told WSJ that they may have to extend it further, warning that “although Bharti is willing to go some way to increase the offer, they may end up with no deal.”
Bharti, India’s biggest cellco by sub numbers, originally tried to acquire MTN last year, but met political and union opposition in South Africa.
Under a revamped offer tabled in May, Bharti would take a 49% stake in the South African operator, which in turn would get a 36% piece of the Indian firm. MTN would pay around $2.9 billion in cash and newly issued shares for a 25% stake in the Indian company.
Bharti has not revealed the cash component of its offer, but analysts estimate it at between $6.5 billion and $7 billion, the WSJ said.
One source said the Bharti sweetener was being discussed, but warned that other issues also needed to be settled. Another said exchange rate volatility had led to the extension in August and could still scupper the deal.
If successful, the merger would create one of the world’s biggest cellcos, with 200 million customers and combined sales of more than $20 billion in India, the Middle East and Africa.