Pantaloon Retail has entered into an agreement to sell its stake in Future Capital Holding ( FCH) to Cloverdell Investment Ltd (one of the affiliated entity of Warburg Pincus) for a consideration of Rs 162 per share. The deal will happen in two tranches, in the first stance Warburg will buy 40% stake of FCH from Pantaloon, at a price of Rs 162, that will help pantaloon garner Rs 420 crore.
Based on SEBI guidelines, post acquisition, 26% open offer would get triggered, if the offer does not get subscribed then Pantaloon will make for the balance share, further modalities of the same would be announced later.
We believe that stake sale in FCH is in line with non core asset monetization strategy of Pantaloon group to deleverage its balance sheet, and would help in resorting some strength to the balance sheet, and hence is positive for Pantaloon Retail.
Along with the stake purchase Warburg Pincus will also subscribe to the compulsorily convertible preference share of FCH of Rs 100 crores. This development of having strong strategic partner- Warburg pincus along with equity infusion in the company is positive for Future Capital Holdings.
At 11.08 am, Pantaloon Retail was trading at Rs151.65 up by 2.12%, with a volume of 7.08 lakh shares trading on the BSE.
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Based on SEBI guidelines, post acquisition, 26% open offer would get triggered, if the offer does not get subscribed then Pantaloon will make for the balance share, further modalities of the same would be announced later.
We believe that stake sale in FCH is in line with non core asset monetization strategy of Pantaloon group to deleverage its balance sheet, and would help in resorting some strength to the balance sheet, and hence is positive for Pantaloon Retail.
Along with the stake purchase Warburg Pincus will also subscribe to the compulsorily convertible preference share of FCH of Rs 100 crores. This development of having strong strategic partner- Warburg pincus along with equity infusion in the company is positive for Future Capital Holdings.
At 11.08 am, Pantaloon Retail was trading at Rs151.65 up by 2.12%, with a volume of 7.08 lakh shares trading on the BSE.
....more info