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Reliance Communications, India’s second-largest mobile operator, is in talks with at least four private equity firms about combining forces to make an offer for Hutchison Essar, a smaller rival.

Vodafone Friday confirmed it was considering the acquisition of a controlling stake in Hutchison Essar, India’s fourth-biggest mobile operator.

Reliance’s talks with private equity firms underlines the likelihood of a bidding war for Hutchison Essar, which has an enterprise value of about $14bn.

Shares in Hong Kong-listed Hutchison Telecommunications International, which holds 67 per cent of Hutchison Essar, rose 8 per cent on Vodafone’s statement, to a record high of HK$19.08. Reliance declined to comment. However, people familiar with the company said it was in talks with Apax, Blackstone, Carlyle and KKR.

On Thursday, Vodafone’s board gave the go-ahead for management to prepare an offer for Hutchison Essar. Leading Vodafone investors have reacted cautiously but positively to the prospect of a $13.5bn-plus offer for Hutchison Essar. Vodafone’s shares closed down 1.2 per cent at 142p Friday. Vodafone said in a statement earlier: “The board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutchison Essar. Such a transaction would be consistent with its stated strategy of seeking selective acquisition opportunities in developing markets. The process is at an early stage and may or may not lead to a transaction.”

Vodafone is seeking to counter slowing revenue growth in its core European businesses by increasing its presence in emerging markets. Hutchison Telecommunications International said in a statement it had “been approached by various potentially interested parties”, which it did not identify, and cautioned that a transaction was not guaranteed.

Hutchison Telecommunications International is a subsidiary of Hutchison Whampoa, the Hong Kong-based conglomerate.

Hutchison Whampoa has declined to comment. But people familiar with the group have said that an offer of $13.5bn would be regarded as low and unlikely to result in a deal.

Investors in Hutchison Whampoa have become accustomed to the conglomerate disposing of assets so as to bolster its interim and full-year results.

Hutchison Whampoa executives have denied such sales of assets are designed to offset losses from its third-generation mobile businesses, where it has invested more than $25bn. Operating losses at the company’s 3G businesses reached $4.65bn in the first half of this year.

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