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Reliance Infrastructure acquires 18% stake in Pipavav Defence for Rs 819 crore

05 Mar 2015 Evaluate

Reliance Infrastructure has announced the acquisition of Pipavav Defence and Offshore Engineering Company, together with sole management control. Reliance Infrastructure, together with its wholly owned subsidiary (WOS) Reliance Defence Systems, has agreed to acquire from the Promoters of Pipavav Defence 13 crore equity shares representing approximately 18% shareholding in the company at a price of Rs 63 per Share, aggregating Rs 819 crore. JM Financial Institutional Securities is the sole financial advisor and the Manager to the Open Offer.

Pursuant to the aforesaid acquisition resulting in a change in management and control of the company, Reliance Defence Systems, a subsidiary of Reliance Infrastructure, has issued a Public Announcement to make a mandatory open offer to acquire 26% shares from the public shareholders of the company, at a price of Rs 66 per share, in terms of applicable SEBI Takeover Regulations.

As per the agreement with the Promoters, Reliance will also acquire from them such number of additional equity shares of the company, at the same price of Rs 63 per share, as is required to ensure that Reliance’s shareholding is not less than 25.10% of the target company, after taking into account the acquisitions made under the Open Offer.

Post the transaction, the existing promoters of Pipavav Defence will continue to retain a minority stake in the company, together with two non-executive Board seats. The transaction is subject to certain conditions precedent and various statutory approvals, etc.

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