Tata Teleservices Shares Jump on Vodafone Takeover Bid Rumours
Published on: 4th Jan 2014
Note -- this news article is more than a year old.
The shareprice of India's Tata Teleservices Maharashtra jumped by nearly 15 percent on reports that Vodafone is looking at a takeover bid for the company.
Tata Teleservices Maharashtra is the listed affiliate of the larger TTSL and provides services in Goa and Maharashtra. TTSL, as the unlisted larger company operates across the rest of the country.
Reported on Friday, the move would catapult Vodafone to become the country's largest mobile network by subscribers, and extract the Tata Group from a potentially costly agreement to buy out TTSL's minority shareholder, NTT DoCoMo.
Japan's NTT DoCoMo has a right of first refusal on the Tata Group's 59.45 percent stake in their mobile network joint venture, but the Japanese company also has an option that could force the Tata's to buy its 25% stake instead.
NTT DoCoMo has been repeatedly rumoured to be disappointed with its Indian investment and looking to sell. Such a deal would give Vodafone majority ownership of the mobile network, and enable it to buy out the remaining minority shareholders.
Vodafone would also gain access to TTSL's substantial radio spectrum licenses, which could assist the company reducing its bidding during the forthcoming auctions, as well as mitigating the dispute over the renewal of its existing licenses, which the regulator is trying to reclaim and auction off again.