The proposal to the Australian Competition and Consumer Commission will outline why Vodafone thinks its bid won't "substantially reduce competition." That's the key test applied by the commission in assessing mergers.
Ross Jones, the mergers commissioner at the ACCC, said he expects Vodafone to submit its proposal this week. "Yes, most definitely, tomorrow or Friday."
Vodafone would be the second potential buyer of Optus's assets to make a proposal to the regulator. Telecom Corp of New Zealand earlier submitted a similar proposal.
Telecom Corp itself is set "to make a further indicative offer (to the ACCC) by week end," said Trevor Rowe, chairman of Salomon Smith Barney Australia, a unit of Citigroup Inc Salomon and Macquarie Bank Ltd are advising the New Zealand company.
Sydney-based Optus, with a market value of A$14.9 billion (US$8.2 billion), has mobile phone, cable and data businesses. It has about 33 percent of Australia's mobile market, second to Telstra Corp's 46 percent.
"Certainly we reach a point where indicative offers are received, but they're not binding, they're indicative," Paul O'Sullivan, head of Optus's mobile unit, told reporters.
O'Sullivan said the non-binding offers are expected this week. He declined to be more specific.
Obstacles for Vodafone
The ACCC may object to a Vodafone purchase of Optus unless the UK company agrees in advance to sell some of Optus's assets if its bid succeeds, analysts have said. Vodafone has about 19 percent of Australia's mobile market.
Michelle Hindson, a spokeswoman for Vodafone, declined to comment.
London-based Cable & Wireless Plc, which owns 53 percent of Optus, has been selling less profitable consumer assets to focus on corporate businesses. It's been seeking buyers, without success, for parts of Optus for more than a year, at a time when competition is accelerating in the mobile market.
While Singapore Telecommunications Ltd also has held talks with Optus, SingTel declined to comment on whether it plans to make a bid.
JP Morgan Chase is advising Optus. Merrill Lynch & Co is advising Cable & Wireless Plc. Vodafone is being advised by Goldman, Sachs & Co.
Optus today rose 0.5 percent to A$3.96.
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