New Delhi: Aiming to acquire a controlling stake in SpiceJet, media magnate Kalanithi Maran on Monday launched an open offer to acquire an additional 20% stake in the no-frill airline for an estimated Rs479.29 crore.
The move comes two days after Maran, chairman and MD of Chennai-based Sun TV Network, agreed to acquire 37.73% stake in the company in his individual capacity and through his aviation company KAL Airways, at Rs57.76 a share — a premium of 3% over Friday’s closing of Rs56.05.
“The acquirers... hereby make this offer to shareholders of the target (SpiceJet) to acquire up to 8,29,80,161 equity shares... of face value of Rs10 each, representing in aggregate 20% of ...the target company at a price of Rs57.76 per fully paid-up equity share...,” KAL Airways’ offer manager Enam Securities said in public announcement.
The offer, to be launched on 6 August, would close on 25 August, it said.
Last week, Maran and KAL Airways acquired the stake from former SpiceJet promoters American investor Wilbur Ross and his investment companies, and Kansagara family-promoted Royal Holding Services Ltd.
According to the announcement, Maran bought the 37.73% stake at a price of around Rs47.25 per share, entailing a total payout of about Rs739 crore.
Commenting on the transaction between him and Maran, Wilbur Ross said he received a “very fair price” for offloading his entire 30% stake in the airline to the Chennai-based industrialist and his company KAL Airways.
“We find the price to be very satisfactory to us. We think it is a very fair price,” Ross said in Mumbai on Monday.
Speaking to a private television channel in Mumbai today, Ross said the price was negotiated “for quite a long time. And we think it is a very fair price.”
He said his foreign currency convertible bonds (FCCBs) were to mature in October. “Under the regulations, we could not have converted them over. So the best option was to find a strategic buyer and negotiate the transaction with him.”
The stake purchase from WL Ross involved acquisition of around 10 per equity which was already converted. The rest of it was in the form of FCCBs which, when converted, would amount to another 20% stake.
Another SpiceJet stakeholder and director Ajay Singh said, “we think the deal is good for the company because it adds a great deal to it. Maran has a group which is quite strong financially. It would also bring in a lot of value to SpiceJet. I think there is a bright future both for the industry and SpiceJet in particular.”
To a question whether he too has plans to exit, Singh said “at this time, I have no plans to exit at all”.
As on 31 March, 2010, the public shareholding in SpiceJet stood at 87.15% including 34.28% held by institutional investors from India and abroad.
Expecting a good premium offer in the open offer, the SpiceJet counter rallied as much as 6% to Rs59.55 in morning trade but closed at Rs55.30 a share, down 1.34% over the previous close on the Bombay Stock Exchange, spooked by the low premium in the open offer.
For some time, SpiceJet had been in the process of raising $75 million (about Rs350 crore) through placement of shares.
The airline, India’s second largest low-cost carrier, has a market share of about 13% with a fleet size of 20 aircraft — connecting 19 destinations across the country.
It plans to launch international flights, starting with services to Bangladesh and Nepal, from this month. It recently received the government’s approval to start international operations and reported a revenue of Rs2,242 crore and a profit of Rs61.4 crore for the year ended 31 March, 2010.
Maran’s Sun TV Network has a significant presence in the print and television media. The network operates about 20 television channels in different languages, besides owning FM channels and newspapers.
The group raked in a profit of Rs519 crore for the year ended 31 March,2010. During the same period, Maran and his wife, Kaveri Kalanithi, together took home an annual compensation of Rs74.16 crore.\