Idea to launch open offer for Spice on 22 August

30 June 2008

Mumbai: Aditya Birla group firm Idea Cellular along with Telekom Malaysia International (TMI), TMI Mauritius, TM International Berhad and Green Acre Agro Services have made an open offer to acquire a further 20 per cent stake in Spice Communications.

The open offer for acquiring up to 137,985,050 equity shares of Spice Communications at Rs77.30 each, for around Rs1.066.63 crore, will open on 22 August and close on 11 September, according to a filing with the Bombay Stock Exchange.

Idea Cellular, India's fifth-largest mobile operator, had, last week struck a three-way deal to acquire Spice. Under the deal, Idea would buy Spice Group's 40.8 per cent stake in Spice Communications and merge it with itself through a share swap. The deal is worth a total Rs2,720 crore, excluding the non-compete fees.

Under the deal, Idea will also acquire Telekom Malaysia International's 39.2 per cent stake in Spice and offer the Malaysian firm a fifth of Idea in a preferential allotment.

After the merger, Telekom Malaysia International will hold five per cent stake in Idea, in exchange for its existing 39.2 per cent stake in Spice. Later, Idea will issue preferential shares to Telekom Malaysia International at Rs156.96 per share, raising Rs7,294.4 crore. Post-issue, TMI will hold close to 20 per cent in Idea.

Spice shareholders would get 49 Idea shares for every 100 Spice shares held.