Shares of VIP Industries Ltd sank over four percent in trade on Monday, July 14, but reversed course to close with five percent gains, as the promoters, Dilip Piramal and family, have entered into a definitive agreement with a group of sellers to offload 32 percent in the firm.
Multiples Private Equity Fund IV, Multiples Private Equity Gift Fund IV, Samvibhag Securities Pvt. Ltd., along with Mithun and Siddhartha Sancheti, have collectively agreed to acquire a 32 percent stake in VIP Industries. The transaction was officially announced on Sunday evening.
Further, the transaction will trigger an open offer in accordance with the SEBI Takeover Regulations. In addition to the 32 percent stake, the buyers will launch a mandatory open offer to purchase up to another 26 percent in the company.
At close, shares of the firm were quoting Rs 480.95 on the NSE, up 5.3 percent compared to the previous session's closing price.
The 32 percent stake will be acquired for Rs 1,763 crore at Rs 388 per share, a 15 percent discount to VIP Industries’ closing price on Friday. The open offer for the additional 26 percent will cost Rs 1,437 crore, bringing the total deal size for a 58 percent stake to Rs 3,200 crore.
The seller group includes entities such as DGP Securities, Kemp and Company Ltd., Piramal Vibhuti Investments Ltd., Alcon Finance and Investments Ltd., DGP Enterprises Pvt. Ltd., Kiddy Plast Ltd., and Dilip Piramal.
Dilip Piramal, Chairman of the Company, said, “We are pleased to welcome Multiples
consortium as strategic partners in the Company. This marks an important step toward reviving
the company’s strong legacy and helping it regain its foothold in the Indian luggage market, where
it has struggled in recent years.”
Over the past one year, shares of the firm have slipped around 4.4 percent on the NSE. In comparison, the Nifty 50 has gained around 2.2 percent during the same time period.
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