Allcargo Logistics on Wednesday said it has received markets regulator Sebi's approval to launch an open offer to acquire an additional 26 per cent equity stake in logistics firm Gati.
On completion of the open offer, which was announced when the deal was inked in December 2019, Allcargo will emerge as the controlling stakeholder in Gati with a 46.83 per cent ownership, the company said in a statement.
Allcargo is offering to acquire around 3.17 crore shares, constituting 26% equity stake in Gati at ₹75 apiece. If the open offer is successful, it will take Allcargo's stake in Gati to 46.83 per cent, the company added.
Reacting to the development, Allcargo's shares on Wednesday gained nearly 1 per cent to ₹110.40 apiece, while Gati's stock closed 0.75% down at ₹66.55 on the BSE.
"This will mark the completion of the acquisition process which was initiated on December 5, 2019. The open offer is expected to be launched this month and to be closed by April," the company said.
The statement further said Allcargo has already deposited ₹238 crore, equivalent of 100% of the capital required to fund the open offer, into an escrow account set under the relevant Sebi norms for the open offers.
The company has already completed the preferential allotment and part purchase of promoter shares in January, following which two Allcargo directors have already been appointed on the Gati board.
"The acquisition is in line with our long-term strategy to strengthen the domestic business and will further synergise our efforts to offer end-to-end services to our domestic and international customers," Allcargo founder and Chairman Shashi Kiran Shetty was quoted as saying in the statement.
Shetty also said the acquisition will help Allcargo consolidate its position as an end-to-end logistics solutions provider, catapulting it into the market-leading position in the domestic express logistics segment.
The deal will also help it leverage the express logistics business of Gati with Allcargo's logistics courier and parcel logistics business.
"It will help us achieve sustainable growth as a leader in the logistics industry in the short, medium and long run, as this acquisition will help it offer single-window solutions through a combination of ECU Worldwide and Gati at a scale that otherwise does not exist now," Shetty said.
Founded in 1989, Gati operates on an asset-light and hub-and-spoke model, and is now present in 727 districts and makes door-to-door express logistics delivery across 19,000 PIN codes across the country.
The deal had hit a wall after the estranged wife and sons of Gati founder Mahendra Agarwal got an injunction from a local Hyderabad court against the sale and writing to the Sebi on the same.