India’s third largest mobile operator Idea Cellular has reportedly offered Rs40bn (US$595.6m) to buy out US private equity firm Providence’s 16% stake in Aditya Birla Telecom (ABTL). ABTL holds Idea’s 16% share in the country’s largest tower operator, Indus Towers, a joint venture with Bharti Airtel and Vodafone India.
India’s third largest mobile operator Idea Cellular (NSE:IDEA) has reportedly offered Rs40bn (US$595.6m) to buy out US private equity firm Providence’s 16% stake in Aditya Birla Telecom (ABTL).
The offer values ABTL at about Rs250bn (US$3.7bn), the Economic Times cited people familiar saying.
ABTL holds Idea’s 16% share in Indus Towers, a joint venture with Bharti Airtel and Vodafone India. It is the country’s largest tower operator.
Providence’s 16% stake in ABTL equates to an approximate 3.2% stake in Indus. The private equity firm also has a nearly 7% stake in Idea, bringing its total take in Indus to about 5%.
According to the report, Providence would exit ABTL but retain its stake in Idea. One source was cited saying the US firm had found the offer acceptable and, given the fund via which it holds the stake is nearing its end, “an imminent exit is warranted”.
Providence announced in May 2008 that it had agreed to invest US$640m in ABTL to fund its network rollout and ongoing operations. The private equity firm has been rumoured to be looking to sell its stake for some time.
In April 2015, a local report said Providence aimed to sell its 5% indirect stake in Indus by offloading its shares in ABTL and was exploring options for doing so with Idea. According to the report, the company was considering a direct sale or IPO.
Idea and Providence have declined to comment on the matter.
