Sun TV Promoter Kalanidhi Maran bids for SpiceJet Majority Stake – But, why ?

There has been rumours on Sun TV Network getting into Budget Aviation Business over a year. Things are turning out to be true. South Indian Media tycoon Kalanidhi Maran has bid for 51% stake in SpiceJet.

In a initial bid which happened a month ago, Sun TV promoter has offered Rs 700 crore for a 51% stake in SpiceJet. Which calculates out to Rs.55/- per share which is lower than the market price. Knowing SpiceJet was in need of money, Kalanidhi Maran threw the net at a discount price. Soon, other companies joined the fray and started to bid for the stake as well.

It is learned that other companies that are interested in this stake are none other than Anil Ambani’s ADAG group and the financial firm Religare. However, SpiceJet’s promoters, the Kansagra family which hold 13% stake, are not too happy with the offers.

Forced by the competition in bids, Kalanidhi Maran has now raised the bid amount to 800 crores. Seems, SpiceJet might accept to give away 51% stake for around 900 crores.

Initially I thought, the Sun TV group was trying to use up rest of the IPO proceeds. But, with just 70 crores left out in the IPO raised money, Kalanidhi Maran ought to spend from his own pocket to get this majority stake in SpiceJet.

But, the biggest question is – why Kalanidhi Maran interested in SpiceJet stake ? When all other aviation companies are facing tough time already (with fuel price increase, low passenger traffic, high operations cost, etc..), why would a media tycoon want to enter a totally unknown and not-so-good performing business. Here are my views :

1. Kalanidhi Maran has been looking out to start his own domestic airlines since the Sun TV IPO time. But, nothing have materialized.

2. SpiceJet is a budget airlines and performing fairly well when compared to others. So, a stake buy in this airlines might make sense.

3. Kalanidhi Maran might be sitting on piles of money and wanted to invest in a new business far away from media. Domestic budget airlines do have a business scope in the long run and so.

4. Anything else you can think of ?

And, if at all Sun TV promoter managed to get the majority stake in SpiceJet, then what would be the airlines name changed to ? Again, my guess here ..

1. SunJet

2. MaranJet

3. SunSpice

4. what else it could be ?