Jet Airways has decided to pull out of negotiations to buy a strategic stake in Delhi-based low-cost carrier SpiceJet from its key shareholders owing to differences over valuation.
SpiceJet has a market capitalisation of around Rs 750 crore. But according to sources in Jet Airways, the key shareholders have valued the company at Rs 1,200 crore to Rs 1,320 crore ($300 million to $330 million) and are not ready to sell it below this price.
"In the current market situation it is not possible to go ahead with the deal," said a Jet Airways source.
SpiceJet is India's second-largest low-cost carrier (Air Deccan is the largest) with a market share of over 10 per cent.
SpiceJet CEO Siddhant Sharma, however, said, "We are not in talks with anyone currently and there is no deal that is on."
But a SpiceJet shareholder confirmed that talks have been going on.
"Talks are on with Jet Airways and Kingfisher Airlines but they are stuck on valuation. Also, there is no movement ahead as to how the business will go forward," he said.
Jet's CEO Wolfgang Prock-Schaeur could not be contacted and did not reply to a text message.
Interest in the SpiceJet stake rose after the lapse of a clause barring UK-based promoter-director Bhupendra Kansagra from selling 12.91 per cent in the airline till February this year.
Istithmar, the other major shareholder, has expressed interest in increasing its stake and is unwilling to sell the airline at a low price.
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