Bharti Infratel, Indus Tower merger deadline extended

Share price of Bharti Infratel fell 6.46% to Rs 218 apiece in early trade today after the telecom tower firm decided to push the deadline for completion of merger with Indus Towers by over two months till August 31.
Shares of Vodafone Idea also declined as much as 5.61% to Rs 9.25.
The Sunil Bharti Mittal owned tower company informed exchanges that the long stop date for the Indus Towers merger has been extended citing non-completion of conditions precedent to be fulfilled for the scheme to become effective by its previous long stop data which was June 24, 2020.

The final decision to implement the scheme will be taken by the board keeping in mind the best interest of the company and its stakeholders. Both parties have retained the right to terminate and withdraw the scheme.
The move comes at a time the Supreme Court is hearing the crucial AGR matter, whose outcome will define the contours of the telecom market, and future viability, particularly of Vodafone Idea.
Since Vodafone Idea is a customer for both Bharti Infratel and Indus, the final decision in the Adjusted Gross Revenue (AGR) case will have a bearing on the planned mega-tower deal.

This is the third time this year alone that the companies have extended the deadline. The companies had previously stretched the deadline from February 24 to April 24, and then until June 24.
The deal was first announced in April 2018. As part of the deal, telecom majors Bharti Airtel, Idea Cellular Ltd and Vodafone Group Plc, along with private equity firm Providence Equity Partners, had agreed to merge their respective shareholdings in Indus Towers into Bharti Infratel.

The merger, which would create the second-biggest telecom tower company in the world behind only the state-owned China Tower, was initially expected to close by the end of March 2019. But it was delayed last year, and the companies had set themselves a new deadline of October 24, 2019. However, that didn’t happen either. Meanwhile, Idea and Vodafone have merged into Vodafone Idea Ltd.
Merger uncertainty has dealt a blow to Bharti Infratel’s valuations on the bourses. The share has lost 17.73% in one year and fallen 12.73% since the beginning of this year.

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