Spice Mobile on a high as reports ring in takeover rumours

11 July 2008

Mumbai: Spice Mobile hit the 10 per cent upper circuit at Rs24.95 on following reports that Japanese mobile handset maker Sony Ericsson is talks to acquire the mobile phone company.

The small-cap scrip had outperformed the market over the past one month till 10 July 2008, rising 4.85 per cent compared to the Sensex's decline of 8.29 per cent. It had also outperformed the market in the past one quarter, rising 3.42 per cent compared to Sensex's decline of 11.9 per cent.

The stock, with a face value of Rs3, is currently ruling at around Rs 25. Over the last 40 days, Spice Mobile shares have lost one-third of the value, from a high of Rs35.9 on 29 May.

The BK Modi group, which owns 63.2 per cent stake in Spice, had demanded Rs80-100 a share, which values Spice Mobile at around Rs700 crore, reports said. The company has an equity capital of Rs 22.39 crore.

Reports said Sony Ericsson, the world's third-largest handset manufacturer, is in talks to acquire BK Modi's Spice Mobile.

Spice Mobile is the handset company of the Modi group and sells mobile phones under the Spice brand.