*Kalanithi Maran *has offered Rs 700cr to acquire 51% stake in *Spicejet* at the rate of Rs 55 per share which is less than the current market price of Rs 59.
For obvious reasons, the valuation is not acceptable to the shareholders. If the deal goes through, it will be a combination of share sale by existing shareholders and issue of new shares to Kalanithi Maran, who has been keen to enter the aviation sector. *Ernst & Young* is doing the financial due diligence for SpiceJet and *Amarchand & Mangaldas & Suresh A Shroff & Co* is the legal counsel to Kalanithi Maran. *Edelweiss Capital* is advising SpiceJet on the deal. Rumour has it that Religare is also competing for the stake in Spicejet but have not conducted due diligence yet. Transaction Note SpiceJet is promoted by the London-based *Kansagra family* who hold 13% stake in the company. SpiceJet director *Ajay Singh* holds 5%. At the current valuation, Spicejet has a market cap of around Rs 1,390 cr. In 2008, the promoter family was looking to exit its stake in the airline and had appraoched Ajay Singh, *Istithmar *and the* Ruias of Essar Group*for a stake sale. All the 3 had declined the offer. In February this year, Istithmar sold 13.39% in SpiceJet through open market. Istithmar still holds 8.5% in the company through FCCBs. *PE Investments In SpiceJet * Date Investor Size Jul-08 WL Ross & Co. LLC 80 Jan-07 Ewart Investments Ltd 16.1 Sep-07 Istithmar World 12.2 Feb-05 Leverage India Fund - Feb-05 Tata Investment Fund 1.19 Wilbur Ross had made the investment through FCCBs which will mature in Decemeber this year. Ross' stake will go up to 31% if he converts the bonds, forcing him to launch the mandatory 20% open offer, which, he does not want to. Thus, he might look at selling his stake. According to ET, *Kingfisher Airlines* with 65 aircraft has a market cap of Rs 1,286 crore whereas SpiceJet with only 20 aircraft has a market cap of Rs 1,390 crore making it an expensive airline. The stock has seen as much as 60% rise over the past 6 months, compared to Jet Airways, which saw an increase of 42% over the same period. Kalanithi Maran is the promoter of *Sun TV. *Last year, he was in talks to acquire *Star Aviation* for about Rs 1000 cr from his personal capacity. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
