Equity Alert: Idea up 3% on report Telekom Malaysia to buy stake

[K.Karthik Raja]

Equity Alert: Idea up 3% on report Telekom Malaysia to buy stake

Idea Cellular gained 3% to 100 rupees on a newspaper report
Telekom Malaysia will pay 150 rupees a share for less than 15% stake
in the company.
Idea will then buy out the Modis' 40.8% stake in Spice
Communications,
and Telekom Malaysia will have 20% equity in the entity formed after
merging Spice and Idea,
The deal will value Idea Cellular at 400 bln rupees, or $9.3 bln.
The merger with Spice Communications will give Idea strategic
advantage, since Spice holds spectrum in the highly efficient 900 Mhz,
which can accommodate a large number of subscribers

The deal will result in Idea Cellular moving ahead of Tata
Teleservices to become the country's fifth-largest mobile service
provider.
Spice Communications was up 7% at 61.50 rupees on BSE.
So far, 4.6 mln Idea shares have been traded on NSE today. June
futures of the stock were at par to the spot, with 2.5% rise in open
interest.
We have medium-term share price target of 130-140 rupees for Idea
Cellular, with support around 88-89 rupees.