New Delhi: Bharti Airtel has indicated that talks between South African telecom company MTN might go down the merger road rather than an acquisition, hence a bid was not mandated at this time.

A statement from Bharti Airtel said, ''The discussions being held are aimed at combining the strengths of the two leading 'emerging markets' players and accordingly veering towards possible structures to achieve this objective. Bharti would like to reiterate that these discussions are still exploratory in nature and may or may not lead to any transactions.''

The statement clarified that Bharti has not made any bid for the South African telecom major, and does not see any necessity to do so, while calling reports in the media about the bid speculative and incorrect. International media had earlier carried reports that said Bharti might make a $19 billion bid to acquire 51 per cent of MTN, and listed other international operators such as Etisalat was ''interested in bidding'' for a stake in the company.

On 5 May, the Financial Times had reported that Bharti Airtel had submitted an indicative bid for a controlling stake in MTN for around 165 South African rand per share. Later on 9 May, the Dow Jones Newswires had reported that Bharti Airtel was mulling a bid of 175 rand per share.

A key investor in MTN, Lebanon's Makati family, which has tacitly supported Bharti's interest in the South African company was of the view that a deal with Bharti could not be classified as an outright sale of equity. Industry sources too indicate that the possibility of a deal via the merger route could be a real possibilty, if Bharti were to offer MTN shareholders cash and stock. Business Standard reported banking sources indicating the possible ratio of cash to stock at 60:40 in the event of a merger.

A Reuters report said Bharti is expected to make a formal bid for MTN on 23 May. ''The number 23 has special significance for Mittal, and features on the licence plates of his cars, in his phone number and is often a preferred date for meetings and big announcements,'' the report added.

Bharti's foreign institutional investor, Singapore Telecommunications, however, said the takeover talks between Bharti Airtel and MTN were at a very early stage. Lim Chuan Poh, chief executive of SingTel's international operations, said it was too early to say if Bharti would make a bid for MTN.

According to sources, SingTel is already part of the decision making process. However, it remains to be confirmed whether the telecom firm would actually invest in MTN with Bharti.

SingTel chief executive Chua Sock Koong said at a media briefing in Singapore, the talks are "at an extremely preliminary, exploratory stage.''

Other reports say the two companies have not yet started working on the respective valuations of their potential partners and are only likely to start due diligence once the term-sheet agreement is signed. , SingTel is already part of the decision making process. However, it remains to be confirmed whether the telecom firm would actually invest in MTN with Bharti.

A combined Bharti-MTN entity would have around 131 million subscribers, across 23 countries, and would start to infringe on the turf of leading international telecom companies such as Vodafone (over 250 million subscribers), China Mobile (392 million subscribers) and Mexico's America Movil (over 159 million subscribers).