Etisalat says no to Spice

Etisalat was unwilling to pay the Rs 70 a share price sought by the promoters for their stake. The company was ready to shell out up to Rs 60 a share to acquire a controlling stake, but decided to back out as Rs 70 a share was on the higher side, merchant banking sources told Business Standard today.

The company is the largest service provider in West Asia and is looking at entering the growing Indian telecom market. It is open to looking at alternative investment options in the country, Etisalat said.

When contacted, B K Modi, the chairman of Spice Communications, declined to comment on the development. Modi had earlier denied that Etisalat was in talks with him, but said it could be talking to Telekom Malaysia. Etisalat officials could not be reached over the weekend.

Modi holds a 40.8 per cent stake in Spice Communications, Telekom Malaysia holds 39.20 per cent and the remaining 20 per cent is held by public and financial institutions.

Meanwhile, top sources in Spice Communications said that hectic negotiations were on between Telekom Malaysia, AV Birla's Idea Cellular and Modi to sort out the valuation issues. "We hope to make a breakthrough in the next couple of days and arrive at a definite conclusion," the source said.

During the past week, Idea Cellular also alerted bankers to raise debt, a move perceived to be a preparation for the acquisition. However, the quantum of money the company is trying to raise could not be ascertained. Modi had decided to exit the venture, while Telekom Malaysia has the first right of refusal.

Spice operates in Punjab and Karnataka circles where Idea does not have operations. In the recent spectrum allocation, Idea Cellular