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Monday, August 24, 2009

DLF wins bid for Gurgaon land for Rs17bn Gurgaon

DLF Ltd. won the bid to acquire a 350-acre land in Gurgaon for about Rs17bn, exceeding the minimum price of Rs16.96bn. The Haryana government issued a letter of acceptance of the bid to DLF. The nation’s largest land sale in two years envisages to develop a project for homes, offices and a golf course near New Delhi, according to reports. The real estate giant had bid Rs12,000 per square meter. DLF already owns a 3,000 acre township in Gurgaon. The new golf course would be DLF’s second in Gurgaon. The company developed and manages a 142 acre golf and country club in the suburb. The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) had invited bids in January for the Gurgaon land, but re-floated tender in July, after DLF, the sole bidder in the first round, sought easier payment terms, reports a business daily. The financial bids for the land were opened on Aug. 18, where DLF emerged the sole qualified bidder. Other two contenders - country's second largest developer Unitech and Bharti group's Bharti Realty - were disqualified on technical grounds, the financial newspaper added.

Asarco takeover tussle...Sterlite hikes bid yet again

Sterlite Industries India Ltd., a subsidiary of Vedanta Resources Plc, announced that it is raising its offer price for the purchase of substantially all of the operating assets of Asarco LLC, by approximately US$500mn. Sterlite also said that it has proposed to support a plan of reorganisation that is intended to pay creditors in full their allowed amount of claims and full post petition interest. With this improvement, the revised total consideration will increase to cash at closing of approximately US$2.1bn. While there is an increase in the cash consideration, Sterlite said it will receive an about 72.5% interest in the Litigation Trust to be set up by the Debtor in Possession (Asarco) at closing of the transaction to pursue a judgement against Americas Mining Corp. awarded by the US District Court of Texas, Brownsville Division.

Sterlite hiked its bid to about US$2.1bn in cash and a US$207.9mn copper price participation note, the company said in a statement. The move follows an announcement by Grupo Mexico SAB on Monday that it would raise its offer to buy Asarco out of bankruptcy to US$2.2bn in cash plus a US$280mn note, an increase of about US$500mn over its previous offer. Sterlite's previous offer was for US$1.58bn in cash plus a US$200mn note with a present value of US$83mn. The deal is backed by key creditor groups and Asarco's union. The Vedanta unit in 2008 had offered US$2.6bn for Asarco but shelved it as copper prices collapsed. In March this year, it returned with a US$1.7bn proposal.

Bharti-MTN extend merger talks to Sept 30

Bharti Airtel and MTN Group extended talks on merger for the second time extending exclusive agreement to September 30. "No decision or agreement to acquire any shares or implement the potential transaction, has been made, said Bharti. "The discussions may or may not lead to any transaction." Bharti, offered US$10.8 plus 0.5 Bharti shares per MTN share for 49% of the South African carrier, while MTN and its shareholders planned to acquire 36% of Bharti, the two companies said on May 25.

Bharti Airtel will not increase its offer for South Africa’s MTN Group Ltd., Sunil Mittal, Chairman, Bharti Airtel was quoted as saying. The two companies don’t have any contentious issues related to the deal’s structure, which will be broadly in line with what was announced on May 25, a business news channel quoted Mittal as saying. Mittal is very hopeful of a successful conclusion to the talks before the Sept. 30 deadline agreed by the two companies, the report stated.

Indian investors upbeat about economic prospects: JP Morgan survey

Indian investors were upbeat about economic and investment prospects, according to a survey by JP Morgan Asset Management and Valuenotes. The investment confidence index was at 135.9 at the end of July, indicating a high degree of confidence among investors and was calculated by averaging the values of three sub indices.

The index, published on a quarterly basis, aims to measure confidence levels of retail, corporate and financial advisers on the economic and investment environment in India and values are assigned between zero and 200, with zero denoting a very negative outlook and 200 the highest value.

Retail investors are more confident of making additional investments than financial advisers and investors expect the benchmark BSE Sensex to rise to 16,000-17,000 by December. It was down 2.6% at 15,000 on Monday. Half the firms surveyed said the rupee will likely gain in the next six months while 76% of respondents said interest rates will rise.

Weekly Newsletter - Aug 21 2009

The big worry was about a bubble in China and the after effects. Dont expect China to undertake some radical steps in its loose monetary policy. Instead, reports suggest smaller measures may be taken to guard credit growth.

Concerns about drought and its adverse fallout on the economic recovery weighed heavily on the sentiment. Despite some smart recovery from lower levels, the BSE Sensex lost 1.2% and NSE Nifty closed lower by 1.1%. Most global markets too ended in the red.

The swings will continue as we move into an even more volatile week. No major triggers besides the F&O expiry, but then that is enough to add to the wild movement.