Sebi looking at open offer angle in Idea-Vodafone deal

Markets regulator Sebi is considering if the proposed merger of Aditya Birla Group firm Idea Cellular with Vodafone Plc's India unit will trigger an open offer, sources said.

Securities and Exchange Board of India (Sebi), in May this year, had sought clarification from Idea Cellular on the proposed merger. The Aditya Birla Group company had submitted the scheme of arrangement, or merger plan, to the regulator in April.

In March, Vodafone India and Idea Cellular announced the merger of their operations to create the country's largest mobile phone operator worth more than USD 23 billion with a 35 percent market share.

As part of the proposal, Vodafone India will initially hold 50 percent stake in the merged entity.

Later, the British firm will own 45.1 percent of the combined entity while the Aditya Birla group, Idea's parent company, will hold 26 percent after paying Rs 3,874 crore for a 4.9 percent stake.

The remaining 28.9 percent will be held by other shareholders.

According to sources, Sebi is examining the possibility if the proposed merger would trigger open offer under 'takeover' norms.

Under the takeover norms, if an entity acquires 25 percent stake in a listed firm, it has to make an open offer for an additional 26 per cent from public shareholders.