The price for acquisition could be in the range of Rs 2,400-2,600 crore (Rs 24-26 billion), according to sources close to the development.
A high-level management team from SK Telecom is in Mumbai, holding discussions with TTSL officials. "The discussions may continue over the weekend," the sources said. J P Morgan is the financial advisors to the deal.
"A number of parties have evinced interest for a stake in Tata Tele and the company is evaluating the situation," said Kishore A Chaukar, managing director, Tata Industries.
However, he refused to elaborate further. SK Telecom is a CDMA-based services provider in South Korea and has recently ventured into 3G services in that country.
It is not known whether the existing promoters will offload their stake or the company will take the preferential allotment route for this deal.
If SK Telecom picks up a 33 per cent stake in Tata Teleservices, it will have to make an open offer for another 20 per cent under the Sebi takeover guidelines.
After conversion of foreign currency convertible bonds last week, Tata Tele's equity base is 149.28 crore shares of Rs 10 each.
If the Singapore firm picks up 33 per cent stake (46.26 crore shares) in the company, it will end up paying Rs 56 per share - almost double its market price. The deal is likely to be finalised by next week, sources said.
At this price, Tata Tele's valuation will be Rs 7,800 crore (Rs 78 billion). Its current market capitalisation is around Rs 4000 crore (Rs 40 billion).
Tata Tele stock closed at Rs 26.90 on Bombay Stock Exchange.
Tata Tele has presence in over 1,200 towns across 20 circles in the country and has a subscriber base of around 4.2 million. Reliance Infocomm, the other CDMA player in the country, has a subscriber base of around 11.5 million and is valued at about Rs 22,500 crore.
The Tatas hold 66.80 per cent in TTSL, with mutual funds, UTI and foreign institutional investors holding around 9.54 per cent. Others, including private corporate bodies and retail investors, hold 23.66 per cent stake in TTSL.
Telecom deals in the making
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Aircell: Plans to sell 35 per cent stake
Spice: Looking for strategic investors
BPL: NTT DoCoMo, Hutch, Essar in the running to buy equity
Tata Tele: South Korea Telecom in talks to buy 33 per cent
