Idea Cellular to acquire Spice Communication

Idea Cellular to acquire Spice Communication

To buy 40.8 per cent stake in Spice at Rs 77.30 per share

Wednesday, June 25, 2008

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BANGALORE, INDIA: Idea Cellular today said that it will acquire 40.8 per cent stake in Spice Communication Ltd at Rs 77.30 per share from MCorpGlobal Communications Ltd.

India's fifth largest mobile operator will also payment approximately Rs 544 crore to the Spice group as non-compete fee.

Idea and Telekom Malaysia International along with their affiliates will make an open offer for an additional 20 per cent stake in Spice. The open offer will be made at a price of Rs 77.30 per share.

The boards of Idea and Spice have approved the merger of Spice into Idea.

Spice shareholders will get 49 Idea shares for 100 shares in Spice.

Idea will make a preferential allotment to Telekom Malaysia of 464.73 million equity shares at a price of Rs 156.96 per Idea share representing 14.99 per cent of Idea's equity capital post allotment.

With this acquisition, Idea gains entry into the wireless markets in Punjab and Karnataka, which account for 11 per cent in India's total wireless market.

Spice has operations in two out of a total 23 telecom circles and has a customer base of more than 3 million while Idea is present in 11 circles and has a customer base of over 26 million.

"Idea will benefit operationally by leveraging synergies with TM International, which will be a significant shareholder in our company. Further I look forward to welcoming colleagues from Spice into Idea family," said Kumar Mangalam Birla, chairman, Idea Cellular Ltd.

DSP Merill Lynch acted as the financial advisor to Idea while Bharucha and Partners acted as legal advisors.
Lazard was the financial advisor while Norton Rose and Crawford Bayley acted as legal advisors, to TM International.

© CyberMedia News

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