After an inconclusive meeting on Thursday, the Vodafone board will meet again on Friday or after Christmas to decide on bidding for Hutchison Essar, the 67:33 joint venture between Hutchison Telecommunications International Ltd (HTIL) and the Ruias.
While discussing the merits of the proposed bid, merchant banking sources said, Vodafone board members could not agree on how to deal with the Ruias -- whether they should hold their stake or another partner should be brought in that bought them out of the venture. Vodafone is reportedly looking at a $13.5 billion bid. A Vodafone spokesperson declined to comment.
Meanwhile, agency reports said Hutchison Whampoa had received bid interest in its Indian mobile business, but that the prices indicated so far were too low.
"There have been some expressions of interest," a source close to the development told Reuters. The source declined to name the suitors but said Hutchison was unlikely to agree to a bid of about $13.5 billion.
Vodafone shares fell by over 2.2 per cent in afternoon trade at the London stock exchange after it was reported that the company's board would meet today to take stock of the situation.
As for the Anil Dhirubhai Ambani Group, sources in the know said it had decided to bid only after Vodafone put an offer on the table.
In a week of hectic developments, Essar honcho Ravi Ruia met the Vodafone brass in London on Tuesday, according to top merchant banking sources. The UK company was given to understand that the Ruias were open to the Vodafone proposal in case it was able to pick up HTIL's 67 per cent stake in Hutchison Essar.
The Ruias also made it clear that they were in no hurry to exit from the venture and would take a decision only after the contenders put their bids on the table. Ruia, the sources added, was accompanied at the meetings by Vikas Saraf, who handles the group's telecom investments.
Vodafone's final decision to join the race would be crucial as it was seen by merchant bankers as a strong contender for Hutchison Essar. Sources close to the group said it had hinted that it would be ready to up its offer based on an enterprise value of $15-17 billion.
The third bidder in the battle is Maxis of Malaysia, which has already had discussions with the Ruias. However, merchant bankers said, it might not match the financial clout of Vodafone or the Anil Dhirubhai Ambani Group.
Vodafone has been selling its equity stakes in Europe (it sold off 25 per cent in Swisscom just a few days ago) and the US to focus on Asian, African and East European markets. It has a 10 per cent stake in Bharti Airtel, which it bought for over $1.6 billion in 2005.