HDFC Life Insurance Company Ltd (HDFC Life) will seek shareholders' approval later this month for the issuance of preference shares to Exide Industries in the Rs 6,687-crore deal to acquire Exide Life, according to a regulatory filing.
HDFC Life has convened an extra-ordinary general meeting (EGM) of the company's shareholders on September 29 to seek their approval for share issue, the company said in a filing on Tuesday.
Last Friday, HDFC Life announced the deal to acquire 100 per cent stake, representing 185 crore shares in Exide Life by way of cash and preference issue of shares to Exide Industries.
The extra-ordinary general meeting (EGM) of the members of HDFC Life Insurance Ltd will be held on Wednesday, September 29, 2021, through video-conferencing or other audio visual means to transact the special business to issue equity shares on preferential basis to Exide Industries Ltd, the filing said.
The transaction is expected to be a two-step process with merger of Exide Life into HDFC Life being initiated on completion of its acquisition.
Under the deal, HDFC Life will acquire 100 per cent share capital of Exide Life for a total consideration of Rs 6,687 crore, of which Rs 725.98 crore will be paybale to Exide Industries-- promoter of Exide Life-- in cash.
The balance will be paid by issuing 8,70,22,222 equity shares of HDFC Life at a price of Rs 685 per share to Exide Industries through preferential allotment of shares.
Upon completion of the transaction, Exide Industries will hold a 4.1 per cent stake in HDFC Life.
The deal is subject to clearance from the Insurance Regulatory and Development Authority of India (Irdai), Competition Commission of India (CCI), National Company Law Tribunal (NCLT), stock exchanges and by the shareholders of HDFC Life and Exide Industries.
HDFC Life said the issue price of the preference shares to Exide Industries is in accordance with Sebi's ICDR (Listing Obligations and Disclosure Requirements) regulations.
It said the issue price has been determined based on the consideration of valuation report of the target company (Exide Life) and the shares of company (HDFC Life) on September 2, 2021 from independent registered valuers, fairness opinion from merchant banker and pricing certificate from statutory auditor.
The acquisition is expected to be completed before June 30, 2022.
HDFC Life stock closed at Rs 734.30 on BSE, down 0.18 per cent from the previous close.
