Maran set to buy 40% in SpiceJet

Mumbai: Media baron Kalanithi Maran of Sun TV Network Ltd is close to signing an agreement to purchase a nearly 40% stake in India’s second largest low-fare carrier SpiceJet Ltd from its promoter Bhupendra (Bhulo) Kansagra and distressed-assets buyout specialist Wilbur L. Ross for around Rs800 crore, two investment bankers familiar with the development said.
This values the company at Rs2,000 crore against a market value of Rs1,400 crore going by Thursday’s closing price of SpiceJet shares.
Maran, who runs 20 television channels and two general newspapers in south India, will also make an open offer to SpiceJet’s minority shareholders to acquire an additional 20% stake. Under Indian takeover rules, any acquisition of 15% or more triggers an open offer and the acquirer needs to make an offer for at least another 20% of the target company. Edelweiss Capital Ltd is exclusive adviser to the deal.
The shares of SpiceJet fell 0.52% on the Bombay Stock Exchange on Thursday to close at Rs57.85 apiece even as the exchange’s bellwether Sensex index rose 1.59%.
Maran, elder brother of Union textiles minister Dayanidhi Maran, has been keen to enter the aviation industry and had even obtained a no-objection certificate from the ministry of civil aviation to run a non-scheduled air passenger service. Sun Network’s board had given a go-ahead for its future plans to enter civil aviation and import aeroplanes.
11/06/10 Baiju Kalesh & P.R. Sanjai/Live Mint

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Categories: New Jun 2010, SpiceJet Jun 2010