Tata names Maxis as 'preferred buyer' of Idea

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According to wire agencies, Tata Group chairman, Ratan Tata, told journalists in Delhi on Friday, "We have always indicated that we shall dilute our stake in Idea at the right time and right price."

This probably sets the stage for a final resolution to the ownership controversy raging between the Birlas and Tatas in the country's fifth-largest cellular company.

According to industry sources, Maxis had bid at just over Rs. 40 per share for the Tata Group's stake, pipping compatriot Telekom Malaysia and an investor bidding through Australian bank Macquarie.

The Maxis price values Idea at about Rs. 12,500 crore and is at a 140 percent premium over what the Birlas and the Tatas paid to buy out the 33 percent stake held by US telecom company Cingular. The two partners had paid about Rs. 17.50 per share and divided the Cingular stake equally between themselves.

The Tata Group's move lobs the ball in the court of the AV Birla group, which is the majority owner of the company with a stake of just over 50 percent, and has the right of first refusal over the Tata stake.

According to industry analysts, the Birlas would need to shell out over Rs. 4,250 crore to buy out the Tatas' 48.14 percent stake.

Late in the evening on Friday, industry sources said the Birlas have agreed to exercise their right of first refusal (RoFR) and decided to buy the Tata stake, but this information could not be confirmed as the Birla Group officials refused to comment on whether they would match the Maxis offer.

If the Birla group actually decides to exercise this right, it will have to match the price offered by Maxis within 45 days of the offer being made to them.

The Tata group will be free to sell its stake to Maxis if the Birlas forego their right or do not respond within 45 days.

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