Institutional Investors Seek 67% Premium To Hexaware Delisting Offer Price
Hexaware has arrived at a floor price of Rs 264.97 apiece and will accept shares at an indicative offer price of Rs 285 apiece.
Institutional investors are seeking a 67% premium to the offer price set by Hexaware Technologies Ltd. to buy back shares for delisting from stock exchanges.
After several attempts at selling the stake held by Baring Private Equity Asia in the software and outsourcing services provider, the promoter has embarked on delisting through reverse book building—a process to discover price—from Sept. 9 to Sept. 15.
The promoter and associate firms—HT Global IT Solutions Holdings Ltd. and HT Global Holdings BV—arrived at a floor price of Rs 264.97 apiece and will accept shares at an indicative offer price of Rs 285 apiece.
Some of the institutional shareholders, however, have bid at Rs 475 apiece, according to the demand graph on the BSE website. These bids are yet to be confirmed. If accepted, this will increase the cost of delisting.
Mutual funds own 12%, while foreign institutional investors hold 14% in the company.
“We believe investors could bid at Rs 450-480,” Centrum Broking said in its Sept. 8 research report. That, the brokerage said, is a fair price.
In 2013, Baring PE, through its arms, had acquired a 41.8% stake in Hexaware from founder Atul Nishar and other investors at Rs 135 apiece. Subsequently, the private equity raised its stake to more than 70% through an open offer.
Hexaware shares had hit a high of Rs 512.30 apiece in July 2018, following which Baring PE sold an 8% in the open market at Rs 447.5 a share—a 10% discount to the then market price. That fetched the private equity firm close to Rs 1,100 crore. Since then, the stock has fallen and the promoters are now seeking to acquire the 11.38 crore shares at Rs 285 apiece—a 37.92% stake for Rs 3,015.71 crore—through reverse book building.
If final demand builds up at Rs 475 apiece and the private equity arm accepts the price, it would end up paying up to Rs 5,406.1 crore for the remaining shares, implying a total cost of taking the company private to more than Rs 8,300 crore. Baring will need to acquire an additional 27.92% stake to cross the 90% equity mark in order to delist from the exchanges.
