To buy up to 13.7 cr equity shares at Rs 77.30 each

Amit Mitra

Mumbai June 30 Idea Cellular, part of the Aditya Birla Group, along with Malaysian telecom firm TM International (TMI), on Monday made an open offer to acquire a further 20 per cent stake in Spice Communications Ltd.

The open offer is to acquire up to 13.7 crore equity shares of the face value of Rs 10 each of Spice at a price of Rs 77.30 a share. The date of opening of the offer is August 22 and the date of closing is September 11.

On June 25, Idea had announced that it will be acquiring 40.8 per cent stake in Spice for about Rs 2,176 crore at the same price of Rs 77.30 a share. In addition to this, Idea will also pay Rs 544 to the Spice Group as non-compete fee, taking the total deal size to about Rs 2,700 crore.

As part of the deal, Idea had said it would make a preferential allotment of 464 million shares to TMI at a price of Rs 156.96 a share, representing about 15 per cent of Idea’s equity capital post-allotment.

With the acquisition, Idea will be consolidating its position with its market share going up from 9.5 per cent to 11.1 per cent.

Earlier on June 25, Idea Cellular, the fifth-largest mobile operator in terms of subscribers, said it would acquire 40.8 per cent stake in B.K. Modi-owned Spice Group for Rs 2,716 crore.

The long-drawn acquisition would give Idea straightaway two existing circles of Punjab and Karnataka with a subscriber base of 4.4 million.

Importantly, it will gain entry into the fast growing wireless markets of Punjab and Karnataka, which today account for 11 per cent of the country’s total wireless subscribers and would get the crucial spectrum on 900 Mhz band.

The share swap ratio was fixed at 49 Idea shares for every 100 Spice shares held.

Related Stories:
Idea Cellular snaps up Spice
Non-compete fee, almost 25% of offer price
Buyout to Spice up Idea infusion from TMI at huge premium
Modi Group turns focus on new business sectors

(This article was published in the Business Line print edition dated July 1, 2008)
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