Cabinet to take a call on DoCoMo plan to pick 20% in Tata Tele unit

THE Union Cabinet is likely to consider Tokyo-based telecom giant NTT DoCoMo’s proposal to acquire 20.25 per cent in domestic telecom major Tata Teleservices Maharashtra....

Written by Priyadarshi Siddhanta | New Delhi | Published: February 23, 2009 2:18 am

THE Union Cabinet is likely to consider Tokyo-based telecom giant NTT DoCoMo’s proposal to acquire 20.25 per cent in domestic telecom major Tata Teleservices Maharashtra (TTML),a subsidiary of Tata Teleservices Ltd (TTSL) in its meeting this week.

NTT DoCoMo had already made an open offer to the Tata Group company’s shareholders in November last year to acquire an open offer a 20 per cent stake (384,241,919 equity shares) in the listed entity. The announcement came shortly after it acquired a 26 per cent in TTSL for Rs 13,070 crore. If fully subscribed,the offer (to acquire stake in TTML) will cost the Japanese firm more than Rs 800 crores. The closing date of the offer is now March 12,as against January 8 this year. The offer price is understood to have been fixed at Rs 24.70 a share.

But in December,DoCoMo deferred the offer after a delay in approval from Sebi,which is believed to have said that since both firms are operating in India and engaged in the same vertical,valuation for indirect acquisition should be the same as direct acquisition. Under Sebi acquisition rules,it is mandatory for DoCoMo to make an offer for an additional 20 per cent in any Indian listed company after it acquires a substantial stake in the target company.

“Cabinet is expected to discuss the issue at length and take a view on the matter in its meeting,” a source said.

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