Even as recent reports state that foreign investors like Etisalat and Bahrian Telecom have envisaged interest in acquiring Spice stake, a new development has emerged claiming that Idea Cellular and Spice Communications have agreed to a deal under which Idea will acquire 40.8 percent stake of Spice for around Rs.2200 crore (USD 500 million) thereby valuing the company over Rs.5000 crore (USD 1.25 billion).

According to reports, Idea has offered Rs.77-Rs.78 per share to Spice which if compared to Monday’s Rs.53.20 closing price of Spice, appears to be at a premium.

Idea will now have to make a mandatory open offer to the public for 20 percent stake in Spice. Spice partner in the joint venture, Telekom Malaysia is reported to get proportional stake in the new entity i.e.39.3 percent.

The two companies were earlier involved in talks last year as well but ultimately the talks did not went through all the way in reaching to an agreement due to differences in valuation.

The move also puts a question mark on the reported developments linking foreign players like Etisalat and Batelco who had envisaged interest in acquiring Spice stake.