Financial Daily from THE HINDU group of publications
Sunday, Apr 09, 2006
Financial Daily from THE HINDU group of publications Sunday, Apr 09, 2006 |
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Telecommunications Info-Tech - Mergers & Acquisitions Corporate - Corporate Disputes Tatas may agree to Birla offer on Idea Thomas K Thomas
New Delhi , April 8 The spat between the Aditya Birla Group and the Tata Group over Idea Cellular could be moving towards a resolution. The Tatas are likely to agree to sell their stake in the cellular company to the Birlas at the price quoted by Malaysian telecom major Maxis Communications Berhad. The Birlas had agreed to match Maxis' offer to acquire Tata Industries' 48.14 per cent stake in Idea Cellular for about Rs 4,000 crore at the rate of Rs 41 per share. Industry sources said that with the Birlas exercising the right of first refusal, the management control of Idea Cellular may now be transferred to the Aditya Birla Group. "It is only a matter of taking the appropriate approvals and completing the procedures within the specified period of time," said an industry source. Mr Sanjiv Aga, Managing Director of Birla Nuvo, and Mr Kishore Chaukar, Managing Director, Tata Industries Ltd, refused to comment.
Bone of contention
The two sides had locked horns over Idea Cellular after the Birlas approached the Communications Ministry, seeking its intervention in getting Tata Industries to exit from Idea Cellular. The Birlas' main contention was that the Tata holding in Idea Cellular was illegal since the company was already offering mobile services through Tata Teleservices.
Licence norms
As per the licence norms, a single promoter company cannot have more than 10 per cent stake in two different companies offering telecom services in the same area. The Birlas also sought an investigation of Tatas' acquisition of AT&T's stake in Idea Cellular through a Mauritius-based investment company without DoT approval. The Tatas, on the other hand, maintained that there was no violation of the licence norms since there was no single entity called the Tata Group. The Tatas had also said that they would exit Idea Cellular when they got the right valuation.
No official intimation yet
Meanwhile, the impact of the new development on the enquiry being conducted by the Department of Telecommunications (DoT) based on the allegations made by the two corporates is not yet clear. Senior DoT officials said they had not got any official intimation of any agreement between the two sides.
Related Stories: More Stories on : Telecommunications | Mergers & Acquisitions | Corporate Disputes
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