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Business News/ Companies / News/  Pipavav deal: R-Infra makes Rs1,263 crore open offer
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Pipavav deal: R-Infra makes Rs1,263 crore open offer

Open offer made by Reliance Defence Systems and Reliance Infrastructure for purchase of over 191.4 million shares

The open offer has been made at a price of Rs66 a share, according to the offer documents filed with markets regulator Securities and Exchange Board of India. (The open offer has been made at a price of Rs66 a share, according to the offer documents filed with markets regulator Securities and Exchange Board of India.)Premium
The open offer has been made at a price of Rs66 a share, according to the offer documents filed with markets regulator Securities and Exchange Board of India.
(The open offer has been made at a price of Rs66 a share, according to the offer documents filed with markets regulator Securities and Exchange Board of India.)

Mumbai: Taking forward its proposed takeover of Pipavav Defence, Reliance Infrastructure Ltd (R-Infra) on Tuesday made an open offer for the acquisition of a further 26% stake from public shareholders for 1,263 crore.

The open offer made by Reliance Defence Systems and Reliance Infrastructure, for the purchase of over 191.4 million shares, has been made at a price of 66 each, according to the offer documents filed with the markets regulator Securities and Exchange Board of India (Sebi). Pipavav shares on Tuesday closed nearly 4% down at 61.3 at BSE. The public announcement for the open offer would be published in newspapers on Wednesday, which is mandatory under Sebi regulations. Recently, Reliance Infra reached an agreement with the Pipavav promoters for the acquisition of 130 million shares, amounting to 17.66% stake, for 819 crore.

Besides, the sellers have also agreed to sell an additional number of equity shares at the same price (for upto 354 crore) to take the total stake of Reliance Infra to 25.10%, after taking into account the acquisition made under the open offer. Since Reliance Infra has entered into an agreement to acquire voting rights in excess of 25% of the total voting rights of Pipavav, the Sebi norms mandate an open offer to be made for public shareholders to buy 26% stake. The open offer is subject to statutory approvals from fair trade watchdog Competition Commission of India (CCI), the Gujarat Maritime Board and other authorities.

The proposed acquisition of a controlling stake in Pipavav is part of Anil Ambani-led Reliance Group’s recently announced entry into the defence sector. Ambani recently visited the Gujarat facilities of Pipavav and told its 4,000 employees that he would make it the country’s biggest defence manufacturer. The open offer price has been arrived at in accordance with the relevant Sebi Regulations.

Upon completion, the existing promoters will cease to be promoters and Reliance will become the new promoter of Pipavav Defence with sole control. The offer is also subject to certain conditions precedent as per the purchase agreement between Reliance and the Promoters of Pipavav Defence. These include no material adverse event occurring till the completion date and no material change in the laws or threatened litigation relating to business of Pipavav Defence. It would also require approval for change in articles of association by the shareholders of Pipavav Defence, receipt of consents from lenders, completion of CDR package, among others.

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Published: 10 Mar 2015, 11:42 PM IST
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