Idea Cellular open to buyout ideas

Idea Cellular, a JV between the Tatas, Birlas and AT&T, will consider the acquisition of cellular circles that are aligned and contiguous to...

Idea Cellular, a JV between the Tatas, Birlas and AT&T, will consider the acquisition of cellular circles that are aligned and contiguous to its current operations. Significantly, RPG group mobile phone company RPG Cellular’s operations in the Chennai metro circle are still in Idea’s radar, sources said. Idea Cellular, on its own, provides services in five cellular circles.

However, Idea’s condition for acquiring a company like RPG Cellular in Chennai was that it would acquire nothing less than 100 per cent, and through merger currency, meaning it would not be a cash deal, but a share swap.

Idea Cellular officials said the company was open to discussions with other cellular players as long as that could be aligned to the existing circles. ‘‘We are open to any circle that is contiguous through a stock swap merger without cash being involved,’’ an official said. ‘‘A seller like RPG Cellular can then cash out by trying their luck in an IPO, as and when it takes place,’’ he said. When contacted for the RPG group’s view on a possible sale of its Chennai operations, an RPG spokesperson said, ‘‘The group is not in talks with any operator at the moment.’’

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It may be recalled that Idea Cellular (then Birla Tata AT&T Ltd) had earlier acquired RPG’s operations in Madhya Pradesh.

At this stage, the three partners in Idea Cellular — Tatas, Birlas, AT&T — account for almost the entire stake of the company. While the Birlas and AT&T hold around 33 per cent each and the Tatas hold just under 32 per cent, AIG holds the remainder stake of around two per cent in Idea Cellular. The total equity of the company is approximately Rs 2,500 crore. While there has been talk of a change in the shareholding structure, nothing is clear at this stage.

Officials said the shareholding structure could undergo a change at some point in the future, when various options present themselves before the company.