Merger talks between Spice, Idea collapse on financial hurdles

New Delhi, June 19 (UNI) Merger talks between Idea Cellular and Spice Telecom have reportedly broken down after the two sides failed to overcome financial hurdles.

Television reports say talks collapsed after unjustified and arbitrary price demanded by Spice did not appeal to Idea Cellular.

It is reported that Spice quoted almost twice the value of the company.

Bharti Airtel had valued Spice Telecom at around one billion dollars while Spice was seeking 1.3 billion dollars for the merger.

The two sides left the bargaining table because at the price of 1.3 billion dollar, Idea can start its own services in the areas covered by Spice, once it obtains necessary licences.

Spice's weak presence in Karnataka also went against the deal as it ranks sixth in the southern state with a share of around seven per cent.

The BK Modi group holds 51 per cent stake in Spice, while Telekom Malaysia holds 49 per cent. After the Spice IPO, Telekom Malaysia will dilute its holding to 39 per cent and the Modis to 41 per cent.

UNI