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Brookfield said in exclusive talks to buy Bharti Infratel

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Brookfield Asset Management Inc. has entered exclusive talks on a takeover of Bharti Infratel Ltd, India's largest listed wireless tower owner, after submitting a bid valuing the company at about US$11 billion, people with knowledge of the matter said.

[MUMBAI] Brookfield Asset Management Inc. has entered exclusive talks on a takeover of Bharti Infratel Ltd, India's largest listed wireless tower owner, after submitting a bid valuing the company at about US$11 billion, people with knowledge of the matter said.

Canada's largest alternative asset manager offered to buy a majority stake in Bharti Infratel for around 400 rupees per share, the people said, asking not to be identified because the information is private. An investor group including KKR & Co, Canada Pension Plan Investment Board and Blackstone Group LP made an offer for a minority stake in the Gurgaon-based company, which is controlled by billionaire Sunil Mittal, according to the people.

The bid from the KKR consortium was above the recent market price, though less than Brookfield's offer, one of the people said. Shares of Bharti Infratel jumped as much as 3.8 per cent in Thursday trading and were up 3.3 per cent at 1pm in Mumbai.

No final agreements have been reached, and there's no certainty the discussions will result in a transaction, according to the people. Bharti Infratel shares had fallen 12 per cent through Wednesday, giving the company a market value of about US$10.1 billion.

A sale would help parent company Bharti Airtel Ltd pay down net debt that totaled 814.8 billion rupees (S$17 billion) at the end of September. Bharti Airtel said last month it formed a panel to evaluate options for monetising its 72 per cent stake in the tower company. Bharti Airtel hasn't made a final decision on how large a shareholding it's willing to sell in the business, one of the people said.

Carlyle Group LP was also considering a bid for a stake in Bharti Infratel, another person said. Representatives for Blackstone, Brookfield, Carlyle, CPPIB and KKR declined to comment. A spokesman for Bharti Airtel and Bharti Infratel declined to comment beyond earlier statements.

A takeover of Bharti Infratel would be Brookfield's biggest investment in India, according to data compiled by Bloomberg. The Canadian firm agreed in October to buy Reliance Communications Ltd's mobile-phone tower business for an upfront payment of 110 billion rupees, in what would be the largest deal by a private equity fund in the country, the data show.

Brookfield is seeking additional investments in Indian infrastructure, including telecom towers, Anuj Ranjan, the firm's regional head for the Middle East and South Asia, said in an interview last month. It also agreed in October to buy about US$1 billion of commercial property from Hiranandani Developers Pvt, according to Mr Ranjan.

Bharti Infratel has 89,791 towers at the end of September, according to a company presentation. It also owns 42 per cent in Indus Towers Ltd, a joint venture with Vodafone Group Plc and Idea Cellular Ltd. that is India's largest owner of wireless telecommunications infrastructure.

BLOOMBERG