Tata Comm up 3.5%, Google & Amazon in race to buy data biz

Two big multinational companies are in race to buy Tata Communications' data centre business, according to a media report.

August 21, 2015 / 14:42 IST

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Shares of Tata Communications outperformed the equity market on Friday, rising 3.5 percent intraday. A media report suggested that the two big multinational companies are in race to buy the telecommunications and internet service provider's data centre business.

"Search engine giant Google Inc and ecommerce behemoth Amazon are among those in talks with the Tata Group to buy the data centre business of Tata Communications in a deal expected to fetch about Rs 4,261.4 crore to Rs 4,589.2 crore ($650-700 million)," said a media report.

"They are competing with bulge-bracket private equity funds including the Blackstone Group, Carlyle, KKR, Bain Capital and Advent International, who are all looking to buy up to 74 percent stake in the data centre unit and take control of the business that is spread across 44 locations in India and abroad. The salt-to-steel conglomerate is likely to retain a minority stake," the report added.

In a clarification note on stake sale, the company said it has been exploring various strategic options for its data centre infrastructure business in India and potentially Singapore. No assurance can be given that the company will determine to pursue a potential sale or enter into any definitive agreement, it added.

Tata Communications has retained Jefferies LLC to advise the company in connection with exploring these strategic alternatives.At the end of June quarter, Tata Sons has 13.07 percent equity stake and Tata Power Company 4.71 percent in Tata Communications. Panatone Finvest's shareholding stood at 31.1 percent and government continued to hold 26.12 percent stake in the company.