Idea To Buy Modi Spice Stake For Rs 2,200 Crore
By Cerius Shah - Tue 10 Jun 2008 10:48 AM PST
The conflicting reports have now been put to rest. As earlier reported by CS, Idea has finalized the acquisition of BK Modi’s 40.8% stake in Spice communications for Rs 2,200 crore. The final deal pegs the value of each share between Rs 77 and Rs 78, a premium of 45% to Monday’s price of Rs 53.20 reports ET. This brings the overall valuation of Spice to Rs 5,347 crore. Telekom Malaysia is expected to get a proportionate share in the new entity, however, an official announcement expected soon will shed light on the share of transfer of assets owned by Spice in Cellebrum.
Spice has been in poor financial condition and this deal is a direct outcome of the DoT denying Spice a pan-India license. Spice, which currently has 4 million subscribers in Karnataka and Punjab, had proposed a stay in the issue of licenses to new entrants, stating that they would get a first mover advantage in roll-out, bringing Spice to a state of complete collapse. The merger puts it in the hands of the deep pocketed AV Birla Group which currently holds 98.3% of Idea.
Posted in: Mergers & Acquisitions, Operators, Idea Cellular, Spice
