Spice - Idea Merge, BK Modi To Exit Completely: Reports
By Cerius Shah - Fri 06 Jun 2008 11:29 AM PST
Early reports coming in from CNBC state BK Modi is exiting Spice Communications with Idea picking up 40% stake. Idea will replace Modi as the Indian partner with Telekom Malaysia before merging with Spice Communications. Additionally, Telekom Malaysia, which owns 29% stake in Spice will get a proportionate stake in Idea. An announcement is likely to be made on Sunday.
The new entity would form the fourth largest GSM telco after Bharti, Vodafone (NYSE: VOD) and BSNL with a total of 14.43% market share. Regular CS readers will remember Spice was looking to raise a Dubai listing in an attempt to up its networth. Spice which operates in 2 of 23 telecom circles, was denied a pan-India license for not having enough networth. Idea however has licenses to operate in 22 circles and has services operation in 11 areas. Additionally, it also holds spectrum for Mumbai, Bihar & Jharkahand and Tamilnadu (including Chennai). An immediate synergy of such a deal will be Spice’s Punjab and Karnataka circles. Idea isn’t present in either of the circles and the merger will give it an entry in both circles. According to ET, the deal is valued at Rs 72 per share.
Posted in: Mergers & Acquisitions, Mobile, Operators, Idea Cellular, Spice
