Aditya Birla group’s Idea Cellular on Wednesday announced acquisition of rival mobile operator Spice Communications in a deal entailing purchase of a 40.8 per cent stake for over Rs 2,700 crore in shares and cash.
Besides, Idea would also make an open offer, along with Telekom Malaysia, to acquire a further 20 per cent stake in Spice for over Rs 1,000 crore, while the Malaysian firm would be allotted over 46.4 crore Idea shares on preferential basis for about Rs 7,300 crore.
In a stock market filing, Idea said that its board of directors at a meeting held this morning approved entering into a share purchase agreement with Mcorpglobal Communications for acquisition of 281,489,350 shares of Spice Communications, representing a 40.8 per cent stake, at a price of Rs 77.3 per share.
Besides, Idea would also pay Rs 543.97 crore as a non-compete fee to Mcorpglobal.
Idea, along with Telekom Malaysia and its subsidiaries as persons acting in concert (PACs), would also make an open offer for an additional 20 per cent stake in Spice.
Under the deal structure, Idea would also make a preferential allotment of 464,734,670 shares of Spice at a price of Rs 156.96 per share to Telekom Malaysia.
Idea said that the merger of Spice with itself would be based on an exchange ratio of 49 Idea shares for every 100 shares of Spice, which would be subject to all regulatory approvals, including the Department of Telecommunications.