Moneycontrol
Oct 26, 2017 04:03 PM IST | Source: CNBC-TV18

IDFC, Shriram Capital to take final call on merger next week: Sources

Based on a sum of parts analysis, IDFC shareholders pegged the company's fair value at Rs 16,700 crore, which translates to roughly Rs 104 per share.

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A final call on the proposed IDFC and Shriram Capital merger is likely to be taken in the next few days, CNBC-TV18 reported.

The companies are expected to hold a crucial meeting next week to discuss the proposed USD 12 billion merger, which is facing resistance from shareholders, sources with direct knowledge told the channel.

The sources also corroborated that a valuation mismatch is the main contention. A reworked deal aimed at addressing shareholders' concerns has also been rejected by shareholders.

Based on a sum of parts analysis, IDFC shareholders pegged the company's fair value at Rs 16,700 crore, which translates to roughly Rs 104 per share.

Both companies refused to comment when approached. The merger exclusivity period between the companies ends on November 8, 2017.

Earlier, Ajay Piramal, Chairman of Shriram Capital, the holding company for the financial services and insurance entities of the Shriram Group, said: "It is all about the opposition of shareholders. We are the largest shareholders and we will not do anything which is not in the interest of the shareholders."

On July 9, Shriram Group and IDFC Group had entered into an exclusivity arrangement for a period of 90 days to explore a merger between the two entities, with an intent to create a Rs 65,700 crore or USD 10 billion-plus financial powerhouse.
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