Idea Cellular buys Modi's stake in Spice
AV Birla group telecom company Idea Cellular is buying out the Modi group’s stake in Spice Communications, taking complete control of the cellular firm.
After it buys the Modi stake, Idea will make a mandatory open offer for 20% of Spice. ET had reported on the impending deal in edition on June 4.
The Modis, currently Spice promoters, are likely to sell their entire stake and exit the company. Subsequently, the two companies will be merged. Telekom Malaysia, which owns less than 40% of Spice, will hold a stake in the combined entity.
Spice shares closed at Rs 51.95 on Friday, down 3% from its previous close. The benchmark index Sensex, meanwhile, fell 197.5 points or 1.25%. At this price, its market capitalisation is around $850 million. The value of the deal could not be ascertained.
Telekom Malaysia was also interested in increasing its stake in the company. It wanted to buy out the Modis and then explore the option of merging with Idea at a later stage.
The Idea board met in Mumbai on Friday. However, the details of the meeting could not be ascertained. Idea’s managing director Sanjeev Aga and BK Modi of Spice refused to comment.