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Ideal Cellular to Buy SPICE Cellular

Idea Cellular to Buy Spice CellularNEW DELHI: Idea Cellular is set to acquire BK Modi’s 40.8 per cent stake in Spice Communications for around Rs 2,200 crore at Rs 77.50 per share. A top industry source confirmed that the two companies have finalised the deal at Rs 77-78 per share, a premium of 45 per cent to Spice’s closing share price of Rs 53.2 on Monday.

The deal pegs the valuation of Spice Communications at Rs 5,347 crore. The company is likely to make an announcement in the next few days.

After buying out the Modis, Idea Cellular will make the mandatory open offer for 20 per cent stake in Spice that is currently held by the public. The two companies will be subsequently merged, said a source.

Telekom Malaysia, which currently holds 39.2 per cent in Spice Communications, will be given a proportional stake in the combined Idea-Spice entity, sources said. ET had reported about a possible merger between Idea and Spice in its edition dated June 4.

Industry analysts and market watchers say Idea is paying a ‘considerable’ premium, considering that Spice shares closed at Rs 53.2 on Monday, up 2.4 per cent. At Monday’s closing price, the Modis’ stake is valued at Rs 1,497.5 crore, making the entire company worth Rs 3,670.3 crore.
Idea gains considerable advantage with the acquisition of Spice since the latter holds spectrum in the highly-efficient 900 MHz band, which can accommodate a large number of subscribers.
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Ideal Cellular to Buy SPICE Cellular Ideal Cellular to Buy SPICE Cellular Reviewed by Imran Baig on 2:59:00 PM Rating: 5
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