Essar group has made an offer to buy Hutchison Whampoa's 67% stake in mobile phone operator Hutchison Essar at an estimated enterprise value of $17-$18 billion, the Economic Times said.
The offer was made through investment bankers Morgan Stanley and Bear Stearns, who met senior Hutchison officials in Hong Kong on Tuesday, the Indian paper said, quoting investment bankers with knowledge of the meeting.
Essar, which holds 33% in the Indian joint venture, received a line of credit of about $10 billion from Morgan Stanley and Citibank, the paper said on Wednesday.
The Hutchison group's response to the offer was not known, the paper said, adding talks were continuing between other prospective bidders and Hutchison's adviser Goldman Sachs.
"No formal bids have been placed by anybody except Essar. The companies want to do proper due diligence and are waiting for Hutchison to open its books," the paper said.
A spokesman for Essar declined to comment on the report. Hutchison executives were not available for comment.
The Financial Times newspaper on Wednesday reported Hutchison Whampoa had signaled it would only entertain offers well in excess of $14 billion for its stake in India's fourth-largest mobile phone operator.
The FT said Hutchison Finance Director Frank Sixt had dismissed an indicative offer of $13.5 billion reportedly made earlier this month by private equity firm Texas Pacific and Malaysian wireless operator Maxis Communications.
"A lot of people are interested in having an Indian asset. We have one which we are very pleased with," Sixt told the FT.
"And really there has not been anything that would rise to the level of being an offer capable of acceptance."
The paper said Sixt was speaking before Hutchison Telecommunications International, a subsidiary of Hutchison Whampoa, said last week it had been approached by "various potentially interested parties."
Vodafone, the world's biggest mobile operator by revenue, said last week it was considering the acquisition of a controlling stake in Hutchison Essar.
"We don't have anything more to say than the statement we put out last week," a Vodafone spokesman said on Wednesday.
Reliance Communications, India's second largest mobile operator, is also looking at a possible bid in tandem with private equity group Blackstone, a source familiar with the situation told Reuters last week.