Tejas Networks Shares Rally As Tata Sons Looks To Acquire Controlling Stake

Panatone Finvest Ltd., a unit of Tata Sons Pvt., will acquire a controlling stake in Tejas Networks Ltd.

The Tata company has signed an agreement to acquire 43.35% of Tejas for Rs 1,850 crore, triggering an open offer by Tata Sons to acquire shares of the telecom and broadband network products maker from the public, according to an exchange filing.

• As part of the agreement, Tejas will make a preferential allotment of 1.94 crore equity shares at Rs 258 per share aggregating to Rs 500 crore to Panatone.

• There will also be another preferential allotment of 3.68 crore warrants, each carrying a right to subscribe to one equity share at an exercise price of Rs 258 per equity share aggregating to Rs 950 crore.

• Panatone will also take another 1.55 crore warrants, which can be converted into equal number of shares in Tejas between 12th and 18th month of the allotment date.

• Panatone will also make a mandatory open offer for as much as 26% of Tejas shares at Rs 258 apiece, in accordance with SEBI Takeover Regulations.

Tejas Networks Chairman V Balakrishnan said the association provided the company with necessary financial resources, global relationships and strong ecosystem to innovate and scale its business.

The company said it would utilise the proceeds raised from the preferential allotment to invest organically and inorganically in the research and development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities to cater to this large market opportunity, and for other general corporate purpose.

Shares of Tejas Networks jumped as much 5.69% to their highest since November 2018. The stock has climbed 5% in the last six trading sessions.