Bharti Airtel Values DTH Unit At 15,630 Crore As It Buys Back Stake From Warburg
Signage for Bharti Airtel is displayed atop one of the company’s stores in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Bharti Airtel Values DTH Unit At 15,630 Crore As It Buys Back Stake From Warburg

Bharti Airtel Ltd. will acquire Warburg Pincus’ 20% stake in its direct-to-home business in a deal worth Rs 3,126 crore.

The transaction will give the parent full control of the DTH unit, according to the company statement.

The deal values Bharti Telemedia Ltd. at Rs 15,630 crore, according to BloombergQuint's calculations. Warburg will own 0.66% in the parent after the deal, while Bharti Airtel will see a dilution of 0.67% after issuing shares to the private equity fund.

The acquisition includes:

  • A preferential allotment of 3.65 crore Bharti Airtel shares at Rs 600 apiece to an affiliate of the private equity firm - a premium of 0.5% to the floor price under regulatory norms.
  • A cash payment of Rs 937.8 crore on the closing date of the proposed transaction, subject to adjustments not exceeding Rs 100 crore.

The deal will help reorganise the shareholding of Bharti Airtel in its subsidiaries which have overseas holding restrictions, allowing the group to increase foreign ownership in the parent company.

“DTH is an integral part of our homes strategy and this transaction is another step towards simplifying the shareholding of our customer-facing businesses providing structural flexibility and ease of implementation,” Harjeet Kohli, group director, Bharti Enterprises, said in the statement.

Business Reorganisation

In its meeting on Wednesday, Bharti Airtel’s board also constituted a special committee of directors to evaluate various options for reorganisation of the company’s businesses and shareholding structure “to achieve required flexibility and sharper focus on digital and non-telecom businesses of the company to enable any unlocking of enhanced value for its stakeholders”.

The committee will share its recommendations to the board, though no timeline was stated by the company in its filing with stock exchanges.

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