Essar mounts hostile bid for Spice

Posted on | April 27, 2005 |

Economic Times reports that the Essar group is trying to buy out the stake of foreign partners in Spice Telecom. Essar has a 33% equity in Hutch Essar (India’s third largest operator) while Spice is a provider in Punjab and Karnataka circles.

However, it will not be easy for the Essar group to buy out the holdings in Spice since the BK Modi group has the first right of refusal, said Mr Das. Essar’s offer price to the constituents of Spice is still unknown. Currently, cellular companies are being valued at about $400 per subscriber. Therefore, Spice should be valued at about $600m, if one assumes that its subscriber base totals 1.5m, as reported by the Cellular Operators Association of India (COAI).

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