Speculation on Hutchison Essar

Several groups have announced interest in Hutchison Essar, a JV between HTIL (67%) and Essar group (33%) in India. Some did not, but are believed to be. First rumors appeared that two US private equity firms (Blackstone and TPG) would be interested in a deal to buy the third largest Indian mobile operator with 22m subscribers (22% market share). Then appeared a potential consortium, made of Blackstone and Reliance, a rival for Essar) to take over Hutchison Essar in a potential $8bn+ deal. Another buyer could be Bharti, India's largest GSM provider, which said it is interested in Hutchison Essar, but only if the Ruias of the Essar group approve.

Effectively, a deal will have to gain first the approval of the JV partner Essar, that claims pre-emption rights over any sale by HTIL of its stake in their joint venture. Up to now, Essar and the Ruia family have forced Hutchison Essar to withdraw twice IPO offers in the last 18 months, preventing it to have access to the financial market. And Essar until now had been keen to increase its stake in the joint venture rather than sell. Analysts said that HTIL is keen to sell because it needs money to help revive its struggling 3G telecom division, 3. Who will win?