FACTBOX-Regulatory hurdles to any bid for S.Africa's MTN

JOHANNESBURG, May 27 (Reuters) - India's Bharti Airtel (BRTI.BO: Quote, Profile, Research) and South Africa's MTN (MTNJ.J: Quote, Profile, Research) have restarted merger talks to create a major emerging markets telecoms group, a year after previous talks broke down over who would control a combined entity. [nLR511040]

Below are details of the possible regulatory obstacles facing any foreign company aiming to take a stake in MTN.

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Any company planning to buy a 100 percent stake in a listed South African company must do so via a "scheme of arrangement" or a general offer to shareholders.

The scheme of arrangement process is court sanctioned, needs the support of the company targeted and approval by three-quarters of scheme members present and voting at a special meeting.

Only after the approval of the requisite number of shareholders, and provided no shareholder lodges an objection with the High Court, will the High Court sanction the scheme of arrangement.

If a deal is done through a general offer to shareholders, company support is not required nor is a shareholders' meeting.

If shareholders holding more than 90 percent of the target shares accept the offer, the buyer may invoke the provisions of the Companies Act and expropriate the remaining shareholders.