Kalanithi Maran of Sun Network buys stake in SpiceJet

Kalanithi Maran, Chairman and Managing Director of Sun Network, acquired 37.75% stake in SpicJet for Rs.7.5 billion. The deal was finalized on June 12, 2010.

Currently, SpiceJet’s share prices stand at Rs.56.05 but Maran acquired stakes at a discount rate of Rs. 47.25 per share. Maran bought 30% share from Wilbur L Ross, a renowned American investor, who specializes in failed businesses. He acquired another 7% from the Kangasagaras, the former promoters of the airline.

Post-acquisition, Maran announced that Bhupendra Kangsagara will remain on the board of the airline.

As per rule, on June 14, 2010, Maran will make an open offer to acquire another 20 percent stake in the airline. Any acquisition beyond 15% would have to be followed by an open offer for another 20%. Maran is looking forward to offer Rs.58 per share. If nobody makes an offer, then Maran would own over 57% stake in the airline.

SpiceJet is the second largest low-cost airline in terms of market share. The airline started its operation in 2005. In 2007, Skytrax, a subsidiary of the Inflight Research Services, voted SpiceJet as the best low cost airline in South Asia and Central Asian region. The airline is based in Delhi.

Kalanithi Maran, is a media baron. He owns 20 television channels and two general newspapers in southern India. Maran’s younger brother, Dayanidhi Maran, is textile minister in the central government.