The conflict over Idea Cellular, the Tata-Birla joint venture, appears to be resolved, with Tata group chairman Ratan Tata announcing that his company was upholding the right of their partner in buying them out.
This brings to a happy end the nearly four-month old feud between the two oldest business groups in the country. "They have a right to buy our stake in Idea and are willing to match the offer we got from Maxis," Mr Tata said in Hyderabad.
He said that according to the "shareholders’ agreement, there is a clause whereby we have to offer our stake to the Birlas first. They have indicated their willingness to match the price offered by Maxis." He was responding to reports that the Birlas could buy out the 110 crore shares held by Tatas in Idea for an estimated Rs 4,600-4,800 crores.
This amounts to around RS 42-44 per share. Earlier reports indicated that the Tatas could consider Maxis Telecom’s offer in case the Birlas failed to match the Malaysian company’s offer in 45 days. Maxis had recently bought Aircel Telecom from Sivasankaran.
Sources in the industry said said that the Birlas may even pay more than what Maxis has offered. With this deal, the Birlas will own 98 per cent in Idea and will be the fifth largest cellular operator in the country.
According to the shareholders agreement, the Birlas have the first right to refuse if the Tata’s want to offload their stake. The fight between the two groups became public when the Birlas wrote to the government seeking the ouster of the Tatas from the joint venture on the grounds that the latter had violated the telecom licensing conditions.
The Birlas contended that the Tata holding in Idea was illegal since the company was already offering mobile services through Tata Teleservices.
This brings to a happy end the nearly four-month old feud between the two oldest business groups in the country. "They have a right to buy our stake in Idea and are willing to match the offer we got from Maxis," Mr Tata said in Hyderabad.
He said that according to the "shareholders’ agreement, there is a clause whereby we have to offer our stake to the Birlas first. They have indicated their willingness to match the price offered by Maxis." He was responding to reports that the Birlas could buy out the 110 crore shares held by Tatas in Idea for an estimated Rs 4,600-4,800 crores.
This amounts to around RS 42-44 per share. Earlier reports indicated that the Tatas could consider Maxis Telecom’s offer in case the Birlas failed to match the Malaysian company’s offer in 45 days. Maxis had recently bought Aircel Telecom from Sivasankaran.
Sources in the industry said said that the Birlas may even pay more than what Maxis has offered. With this deal, the Birlas will own 98 per cent in Idea and will be the fifth largest cellular operator in the country.
According to the shareholders agreement, the Birlas have the first right to refuse if the Tata’s want to offload their stake. The fight between the two groups became public when the Birlas wrote to the government seeking the ouster of the Tatas from the joint venture on the grounds that the latter had violated the telecom licensing conditions.
The Birlas contended that the Tata holding in Idea was illegal since the company was already offering mobile services through Tata Teleservices.