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Max India advances on plan of diluting stake in MHC for 794 crore

23 Jul 2014 Evaluate

Max India is currently trading at Rs. 322.80, up by 5.30 points or 1.67% from its previous closing of Rs. 317.50 on the BSE.

The scrip opened at Rs. 329.50 and has touched a high and low of Rs. 329.80 and Rs. 321.75 respectively. So far 95472 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 346.45 on 04-Jun-2014 and a 52 week low of Rs. 150.50 on 04-Sep-2013.

Last one week high and low of the scrip stood at Rs. 327.00 and Rs. 304.00 respectively. The current market cap of the company is Rs. 8619.99 crore.

The promoters holding in the company stood at 40.50 % while Institutions and Non-Institutions held 51.28 % and 8.22 % respectively.

Max India is set to dilute its stake in Max Healthcare in favour of its South African partner Life Healthcare in an all-cash deal of about Rs 794 crore. Life Healthcare (LHC), a $2 billion South African healthcare major, is set to invest up to an additional Rs 794 crore in Max Healthcare (MHC), one of India’s leading private healthcare providers. LHC will pay Rs 67.50 per share to equalize its stake with Max India in MHC, in an all cash transaction which puts the enterprise value of MHC at Rs 3,650 crore and its equity value at Rs 2,884 crore.

In January 2012, Life Healthcare had invested Rs 50.24 per share, translating to Rs 516.5 crore, to acquire a 26% stake in Max Healthcare. The current transaction will lead to equalization of stake of both joint venture partners as envisaged in their original JV agreement. Post transaction, both JV partners will have equal representation on the MHC Board. The brand name of Max Healthcare will remain unchanged.

IFC, Washington currently holds 7.5% stake in MHC and has the option of either maintaining its 7.5% stake, by converting a portion of its preference shares to equity, or exercising a proportionate tag along right with Max India so as to dilute its shareholding to 5.4 %. The actual amount invested by Life Healthcare (and thus the amount received by Max Healthcare and Max India) will vary depending on IFC, Washington’s decision.

Max India is one of India’s leading multi businesses corporate with interests in Life Insurance, Healthcare and Health Insurance. Since its inception almost three decades ago, it has had an experience of managing successful joint venture partnership due to its philosophy of open and transparent relationships always managed in the spirit of equal ownership

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