Abu Dhabi's Mubadala in talks on $1 bln stake in Reliance's Jio Platforms -sources (updated)

Sigma Advanced Systems

28/05/2020 14:51

(Updates to add Twitter in talks with Reliance, detail on
bankers)
    By Sankalp Phartiyal, Saeed Azhar and Sumeet Chatterjee
    NEW DELHI/DUBAI/HONG KONG, May 28 (Reuters) - Abu Dhabi
state fund Mubadala is in talks with Reliance Industries
 RELI.NS  about investing around $1 billion in the Indian
conglomerate's Jio platforms, three sources told Reuters.
    Twitter  TWTR.N  is separately also in talks with
Mumbai-based Reliance to invest more than $1 billion in the
digital start-up, which houses music and movie apps as well its
telecoms venture Jio Infocomm, another source added on Thursday.
    "Clearly Jio's platform is attracting a wide range of
world-class investors, given its enormous potential to serve one
of the world's largest marketplaces," Mubadala said in an email,
without confirming whether or not talks were taking place.
    Due diligence on a potential transaction with Reliance was
already underway, one of the sources said. 
    If it goes ahead, the Jio Platforms investment would be the
largest in an Indian firm by Mubadala, which is the
second-biggest state investor in Abu Dhabi after Abu Dhabi
Investment Authority (ADIA), managing about $240 billion in
assets.  
    Reliance and Twitter did not respond.
    Jio Platforms has so far already agreed to sell a combined
stake of just over 17% through five separate deals with Facebook
 FB.O , which spent $5.7 billion on 9.99%, the first to announce
its investment in April.  urn:newsml:reuters.com:*:nL4N2D40S6
    While talks may be taking place with multiple parties, deals
may not necessarily materialize and any terms may change, a
fourth source, who is familiar with Reliance's strategy, said.  
    All four sources declined to be identified because the talks
are private.
    Reliance plans to wrap up a bulk of the private fundraising
by the third quarter of 2020 and then explore a potential public
listing in the United States in 2021, one of the sources said.
    Both Morgan Stanley  MS.N  and Goldman Sachs  GS.N  are in
talks with Reliance about a possible Jio Platforms IPO mandate,
the source added.
    Reliance executives visited the United States in February to
meet potential investors and bankers and it was looking for a
valuation of $90 billion to $95 billion, the source said.
    However, the source familiar with Reliance's strategy said
that an overseas listing could still be a long way off and that
the company had no immediate need for funds after the recent
investments in Jio Platforms.
    Before making any decision Reliance would also need to have
clarity on rules governing direct overseas listings for Indian
companies, which are still being formulated by the government.
    Global tech firms prefer listing in the U.S. as it provides
companies with greater liquidity and wider access to capital.
    Such a deal would help boost Jio Platform's credentials and
provide an exit for some of the big investors that have agreed
to invest in it, including private equity firms KKR  KKR.N ,
General Atlantic, Silver Lake and Vista Equity Partners. 
    India's Mint newspaper reported on Thursday that Microsoft
is also in talks to buy 2.5% of Jio Platforms for $2 billion. 
    Talks between Reliance and Microsoft had been on since the
two companies announced a cloud computing tie-up last year, a
fifth source told Reuters.  urn:newsml:reuters.com:*:nL4N2581QW
    Reliance is looking to sell roughly 20% of Jio Platforms
through all the private placement deals, the source added.
    Morgan Stanley declined to comment, while Microsoft, Goldman
Sachs did not respond to requests for comment.

 (Reporting by Sankalp Phartiyal in New Delhi, Saeed Azhar in
Dubai and Sumeet Chatterjee in Hong Kong;
Additional reporting by Aditya Kalra in New Delhi, Anirban Sen
in Bengaluru and Kane Wu in Hong Kong; 
Editing by David Goodman, Euan Rocha and Alexander Smith)
 ((sankalp.phartiyal@thomsonreuters.com; +91-11-49548064;))