LIC makes Rs 12,602 crore with an open offer for gaining 26% equity of IDBI Bank at cost of Rs 61.73 per share on 4 October 2018.

Earlier in the day, the IDBI Bank board permitted the proposal for issuance of preferential shares in favour of LIC with a view to increasing the share of an insurer in the bank up to 51%.

A public declaration by LIC for the open offer to shareholders, including retailers, as per the Sebi’s regulations with regard to substantial acquisition and takeover of shares in a company. According to the open offer, LIC proposes to acquire more than 204 crores equity shares of Rs 10 each, equivalent to 26 % equity of IDBI Bank.

IDBI said in a ranking filing, the board of IDBI Bank approved the preferential allotment of equity shares to LIC aggregating up to 51% of post issue paid up capital of the bank.

At a price consideration of Rs 61.73 per equity, assuming full acceptance under the offer for 2,041,512,929 shares (or 26%), the total payable by the acquirer (LIC) will be Rs 126,022,593,107, IDBI said in its latest filing on behalf of LIC.

The offer price will be paid in cash. It has said in filing, “The board of directors of the target company (IDBI Bank) in their meeting held on October 4, 2018, have authorised the preferential allotment representing up to 51%  of the fully diluted voting share capital (preferential issue) in favour of the acquirer (LIC) along with the acquisition control”.

The government has already allowed the proposal of LIC to raise the stake in IDBI Bank.

IDBI Bank board also permitted increasing authorised capital of the bank from Rs 8,000 crore to Rs 15,000 crore.

The meeting also cleared a proposal for re-classification of LIC as the promoter of the bank post-acquisition of 51% stake in IDBI Bank, it said.

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