Kalanidhi Maran to buy 37% in SpiceJet for Rs 940 crore

Kalanithi Maran has entered into an agreement to acquire over 37% equity in the low-cost carrier SpiceJet. The acquisition, including an open offer, which would be completed over the next few months, could cost the Sun TV promoter close to Rs 940 crore.

On Saturday, Maran said he has bought 37.75% stake in SpiceJet @ Rs 47.25 per share, a 16% discount to Friday’s closing price of the share of Rs 56.05.

Based on a diluted equity capital following conversion of foreign bonds, this would mean a total cost Rs573.2 crore, according to DNA.

Under the agreement signed at SpiceJet’s headquarters in Gurgaon on Saturday evening, Maran’s aviation company Kal Airways acquired the stake held by US private equity investor Wilbur Ross and his investment companies as well as those held by the airline’s original promoters, Bhupendra Kansagara and family.

Maran would made an open offer for an additional 20% stake @Rs 57 per share (that’s 76 paise below the 2-week average price of Rs 57.76 per SpiceJet share, according to the Securities and Exchange Board of India formula. The other metric, of 26-week average price, comes lower at Rs 56.85. Regulations need an acquirer to offer the higher of the two prices).

That would cost Maran an additional Rs 366.40 crore, giving him majority stake.

The airline’s promoter, the Kansagra family, will exit as will US-based private equity investor Wilbur Ross, both very profitably.
SpiceJet promoters denied any management changes after the deal, but speculation is rife about the airline’s chief executive officer Sanjay Agarwal leaving after the new owners fly in.
SpiceJet’s share had closed 3% lower on Friday on the Bombay Stock Exchange despite positive sentiment in the market because of rumours the buyout price would be lower.

Sources said Maran’s acquisition price was arrived at a couple of weeks back.

The BSE benchmark index Sensex had risen 142 points to end at
17,064.95 points.