The move will see Allcargo acquiring a controlling stake, post which it is likely to make an open offer to Gati's shareholders
Allcargo Logistics is in final talks to buy out all of Gati’s promoters in the courier company, reports The Economic Times. The move will see Allcargo acquiring a controlling stake, post which it is likely to make an open offer to Gati's shareholders, sources told the paper.
Moneycontrol could not independently verify the report.
Allcargo's 25 percent stake purchase in Gati will trigger SEBI's open offer clause, which makes it mandatory for it to acquire an additional 26 percent from public shareholders.
As of June, promoter Mahendra Agarwal owned 14.38 percent stake in the company, of which 63 percent shares are pledged against loans. Valuation of the deal, which has been underway since August 2018, is still unclear.
Japanese freight forwarder Kintetsu World Express, which owns four percent stake in Gati has not yet agreed to a deal, the report stated. Besides Kintetsu, Goldman Sachs and Bay Capital India own 5.93 percent and 7.22 percent in Gati, respectively.
If the deal fructifies, it would provide Allcargo access to Gati’s infrastructure across 20,000 pin codes in the country, covering 672 out of 676 districts and boost its presence in Asia's third-largest economy.
At 12:20 hours, Allcargo Logistics was quoting at Rs 93.85, up by Rs 1.70 or 1.84 percent; while Gati was trading at Rs 65.25, up Rs 3.10, or 4.99 percent on the BSE.Earlier, Gati was in talks with TVS Logistics to sell 70 percent stake in its joint venture Gati-Kintetsu Express for Rs 1,500-2,000 crore. Allcargo too was in talks with Blackstone to sell a part of its India-based warehouses venture for Rs 1,500 crore, the source added.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.