Market regulator Securities and Exchange Board of India (Sebi) has cleared the acquisition of Ispat Industries by JSW Steel, paving the way for the acquirer to make a fresh offer for buying up to 20 per cent stake from public shareholders.
Sebi has issued its final observations on the Rs 1,329 crore open offer for acquisition of 20 per cent stake in Ispat from public shareholders by the acquirer JSW Steel.
The open offer was earlier scheduled to begin on February 12, but got delayed due to lack of Sebi approval. The revised schedule for the open offer is likely to be announced soon, as the market regulator has now cleared it.
In December 2010, Sajjan Jindal-led JSW Steel had entered into a Rs 2,157 crore deal to acquire a 41.29 per cent stake in Ispat through preferential issue of fresh shares at a price of Rs 19.85 apiece.
The deal has an enterprise value of about Rs 12,000 crore after paying all the debts and a working capital loan of Ispat Industries, estimated to be about Rs 9,500-9,700 crore.
As part of the deal, JSW Steel had offered to acquire an additional 20 per cent stake from public shareholders at a price of Rs 20.54 per share in Ispat, aggregating to Rs 1,329.43 crore.
Any company buying more than 15 per cent in a listed company needs to mandatorily make an offer to buy 20 per cent additional stake from public shareholders and a Sebi approval is required for this offer.
JSW Steel had sought Sebi approval in December 2010 itself, but the approval got delayed as regulator had sought some clarifications on the deal.