Tata Communications surges on potential takeover of unit Neotel

Reuters

Reuters Market Eye - Shares in Tata Communications (NSI:TATACOMM.NS - News) gain 4.3 percent after South Africa's Vodacom Group (VODJ.J) said on Monday it was in exclusive talks to buy the company's unlisted local unit, Neotel, in a potential $590 million deal.

Acquiring Neotel would be a major boost to Vodacom's ambitions to grow its data business in Africa's largest economy.

"Every US$100 mn of deal equity value adds `15/share to fair value. However, we add a conservative `30/share and raise our target price to `250 and reiterate BUY," Kotak said in a report on Tuesday.

(Reporting by Abhishek Vishnoi)

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