RCOM plans to sell stake in Reliance Infratel (India)
Reliance Communications (RCOM) has hired the investment banking arm of Switzerland-based UBS to sell 95 per cent stake in its tower unit, Reliance Infratel, for $5 billion. The amount has been arrived at by valuing RCOM’s 50,000 towers at $100,000 per tower. However, potential bidders value these assets at a far lower price. UBS has reportedly reached out to companies like the American Tower Corporation, Crown Castle International, Viom Networks and Etisalat for the deal. It has also approached private equity firms like Carlyle, Apax Partners and Blackstone.
Axiata Group increases stake in Idea Cellular
The Malaysia-based Axiata Group has acquired an additional 0.9 per cent stake in Idea Cellular in an open market purchase transaction worth Rs 3.06 billion. The move has increased Axiata’s holding in Idea to 19.98 per cent. This is the maximum stake it can hold in Idea as per the deal between the two parties in June 2008.
Sector records FDI of Rs 54.34 billion during quarter ended June 2011
The foreign direct investment (FDI) in the telecom sector stood at Rs 54.34 billion during the quarter ended June 2011. FDI of up to 49 per cent is permitted for telecom services under the automatic route and of up to 74 per cent through the Foreign Investment Promotion Board.
IMImobile in talks to acquire US-based mobile data company
Mobile data services provider IMImobile is in advanced talks to acquire a US-based mobile data company for about $80 million. The acquisition will enable IMImobile to enter the US and Canadian telecom markets. Financing for the acquisition is likely to come from venture capital financiers Sequoia Capital, Spark Ventures and First Mark Capital, which hold more than 50 per cent stake in IMImobile.
OnMobile approves buyback of company’s fully paid-up equity shares
OnMobile Global Limited has approved a buyback of its fully paid-up equity shares for an amount not exceeding Rs 250 million. The buyback will be subject to a maximum of 4 million shares with the share price not exceeding Rs 85.
Google acquires Motorola Mobility (USA)
Google has acquired US-based Motorola Mobility for $12.5 billion in cash, its largest such deal to date. Google will pay Motorola $40 per share, that is, at a 63 per cent premium on the handset maker’s August 12, 2011 share price. Google will get the $3 billion cash reserves available with Motorola. The acquisition will give Google direct access to Motorola’s portfolio of more than 17,000 patents and 7,500 pending patents. However, a reverse termination fee of $2.5 billion will be paid by Google to Motorola if the deal does not go through.
MTS acquires 100 per cent stake in four fixed line operators (Russia)
Russia-based MTS has acquired 100 per cent stake in four separate fixed line service providers, which together operate under the Altair brand in Tula in the Central Federal District. Altair is the largest cable TV provider in Tula, with 72 per cent market share. It also has 22 per cent share of the local broadband market and a 500 km optic fibre network that covers more than 90 per cent of the city’s households. The purchase price for the deal stands at $23.5 million, including the assumption of Altair’s net debt.
Softbank Corporation to sell stake in Yahoo! (Japan)
Japanese telecom operator Softbank Corporation has decided to sell off most of its 4 per cent stake in Yahoo! to Citibank as a means of repaying around $1.135 billion worth of loans it has with the bank. Softbank took the loans in February 2004 and had announced that it would repay them with its Yahoo! shares. With repayment due by September 30, 2011, Softbank’s equity stake in Yahoo! will drop to 0.002 per cent. The Japanese operator expects to post a one-time profit of about $990 million in the fiscal year ending March 31, 2012, as a result of the transaction.
SLT plans to acquire Suntel (Sri Lanka)
Sri Lanka Telecom (SLT) is planning to spend an estimated $200 million on acquiring Sri Lanka’s second largest land-based telephone company, Suntel, which has been looking for a buyer for the past one year. SLT’s board has taken a decision to purchase Suntel as it is expected to be a financially viable deal. Suntel, which has been beleaguered with debt and legal issues, has attracted offers from various companies including India’s Tata Group, Etisalat, Dialog and a Malaysian company. Mahanagar Telephone Nigam Limited was among the first to submit a formal bid to acquire Suntel in 2010, offering a price in the range of $100-$120 million. It, however, withdrew its bid due to legal problems and high liabilities.
PCCW to list on the stock exchange (Hong Kong)
Hong Kong’s PCCW has received approval from the Hong Kong Stock Exchange to list its telecom assets in a business trust. The trust will continue to own 55 per cent stake while 45 per cent will go to investors. The operator hopes to raise funds of up to $2 billion and is targeting a late October 2011 listing for the trust. Goldman Sachs, Deutsche Bank, HSBC and the China International Capital Corporation were hired as joint global coordinators for the offering, with JP Morgan, Standard Chartered and Singapore’s DBS helping to underwrite the deal.