Mumbai : McGraw Hill Financial Inc, which owns Standard & Poor’s with a controlling 52.8 % stake in Crisil, said it will make a voluntary open offer to raise its holding in the largest domestic rating agency to 75 % in a deal worth about Rs 1,900 crore, reports PTI.
The deal values Crisil at around Rs 8,600 crore, while after a 20 % rally on the bourses the company has a market value of only Rs 8,045 crore on Monday. McGraw Hill currently owns 52.77 % in the Mumbai based Crisil and plans to acquire up to 15.7 million shares, aggregating to 22.23% equity, through the open offer and will be paid in cash, the US company said in a regulatory filing to the BSE.
McGraw Hill said it would pay Rs 1,210 a share, a premium of almost 29 % over the share price on Friday on the BSE at Rs 938.95. The deal will see the company paying Rs 1,896 crore to the existing investors. Shares of Crisil soared 20%, the maximum daily limit, on the BSE to Rs 1,126.60 or Rs 187.75. When contacted, a Crisil spokesperson refused to comment saying they have nothing more to convey. The McGraw Hill announcement comes a little over a month after Unilever had said it would pay up to USD 5.4 billion to raise its stake in Hindustan Unilever, to take its shareholding in the largest domestic consumer goods company to 75 %, the maximum permissible limit under the new public float norms of the market watchdog Sebi.
In a similar deal in November, England-based GlaxoSmithKline had offered to buy a further 31.8 % in its domestic consumer products business for about USD 940 million.
That offer ended up lifting the parent’s stake to 72.5 %, just shy of its 75 % target.
Morgan Stanley India will be managing the buyback deal. The Crisil offer is expected to begin in July and conclude in early August, the McGraw Hill statement said, adding the company will finance the transaction with existing cash reserves.