Brookfield Makes Open Offer For IndoStar Capital

Brookfield Business Partners, along with its institutional partners, will acquire up to 29.53 percent stake in IndoStar Capital Finance Ltd.

Brookfield will acquire 3.7 crore shares of IndoStar Capital at Rs 290 apiece for Rs 875 crore, according to the non-bank lender’s stock exchange said. It will also acquire 1.2 crore compulsorily convertible preference shares—representing 8.44 percent of the voting share capital—for Rs 350 crore, the filing said.

The asset manager will then make an open offer for additional 26 percent stake at Rs 290 apiece—a premium of 2.7 percent to Friday’s closing—to comply with the market regulator’s takeover code. Any investor with more than 25 percent stake in a listed company is required make an open offer to acquire another 26 percent from public shareholders.

If the open offer is fully subscribed, Brookfield will hold 59.02 percent in the non-bank lender for a total price of Rs 2,528 crore. This includes a secondary purchase worth Rs 225 crore from its promoter—IndoStar Capital Mauritius.

As part of the deal, Brookfield will acquire shares under a secondary purchase worth Rs 225 crore from IndoStar Capital Mauritius where Everstone is a majority shareholder, IndoStar Capital Finance Chairman and Chief Executive Officer R Sridhar told BloombergQuint. The company, he said, will use this growth capital for its retail businesses—commercial vehicles, small and medium enterprises and affordable housing.

Currently, IndoStar Capital holds 57 percent stake in IndoStar Capital Finance, Everstone Capital Partners holds 1.23 percent and Ecp Iii Fvci holds 2.51 percent.