Vodafone to Start Due Diligence on Hutch Essar
Vodafone is to begin due diligence on Monday on Indian mobile phone firm Hutchison Essar, the Financial Times reported, a move denied to rival suitors to its potential $18-19 billion bid.
By allowing Vodafone de facto exclusivity to pursue a deal, Hutchison Whampoa, the Hong Kong group that indirectly owns 67% of Hutchison Essar, is effectively burning its bridges with Essar, the minority shareholder, the FT said.
Conglomerate Essar also wants to buy the two-thirds of the mobile phone company it does not already own. The FT said Essar was now "almost certain to go to court to try to enforce its interpretation of a disputed shareholder agreement with Hutchison".
The 67% stake is formally held by Hutchison Telecommunications International.
Another potential buyer, Reliance Communications, has also been denied access to the books, the FT said. It said Vodafone had appointed Ernst & Young to help it conduct the due