Tough call

London, Dec. 24: Britain’s Vodafone, which wants to buy Hutchison Essar, is in the same fix as Tata Steel, which wants to acquire Anglo-Dutch Corus. Both may have to pay more for what it wants.

Vodafone, which confirmed its interest in Hutchison Essar last week, is likely to face stiff competition from Texas Pacific, the private equity group which is said to be willing to open the bidding at $15 billion, it was reported today. Vodafone is believed to be willing to pay $13.5 billion.

The two rivals want to get into India, which is eyed hungrily as the world’s fastest growing mobile phone market — faster than even China.

For Arun Sarin, Vodafone’s Indian-born chief executive, the acquisition is important, since it may help him fight off the enemies within, who think the company has not been doing well since he took over.

But his Christmas may not be full of joyful tidings.

According to today’s Sunday Times, Texas Pacific is just one of the conglomerates entering the fray.

It reports that Hutchison Essar, the number four player in the fast-growing Indian market, is now “in play” after several weeks of discussions with Blackstone, another private-equity firm. Hutchison Telecom International, part of Hong Kong’s Hutchison Whampoa group, has sought rival offers for its Indian business, which is a joint venture with Essar, a conglomerate.

It says: “Blackstone had been working on a deal with Reliance Communications, another leading Indian mobile group. Private-equity sources suggested that TPG was working on its own offer for Hutch Essar. It has also reportedly proposed a bid with Maxis, a Malaysian company. However, late on Friday, a source familiar with the state of the negotiations said that TPG was now in talks with Blackstone and Kohlberg Kravis Roberts, another top-flight American investment group.”