Indiabulls Real Estate (IBREL) NAM Estates (NAM) and Embassy One Commercial Property Developments (NAM Opco have entered into a definitive merger, the companies said in a joint statement on August 18.
NAM and NAM Opco are subsidiaries of the Embassy Group.
The combined IBREL entity, to be renamed Embassy Developments Ltd, will be co-headquartered in Mumbai and Bengaluru.Jitendra Virwani along with other promoter entities of NAM (Embassy Promoters) will become the new promoters of IBREL upon completion of the merger, which is subject to approval of respective creditors and shareholders and applicable regulatory authorities.
The combined IBREL entity will be one of India’s leading real estate development platforms, with 80.8 million sq ft of launched and planned development potential, the statement said.
“This integration provides scale to our two organizations and allows the stakeholders to capitalise on the opportunity created by the market consolidation and dislocations. The transaction also offers growth to the listed entity by combining a portfolio of well-located commercial projects across Mumbai, NCR and Bengaluru, which has seen the largest absorption in office space over the past five years,” said Jitendra Virwani, chairman and founder of the Embassy Group.
“This merger marks the culmination of a journey I began almost 15 years ago to build a world-class real estate company. I am excited to be handing over this platform to Embassy who have a proven track record, excellent execution capabilities and who have created a very strong brand and sponsored a successful listed REIT, said Sameer Gehlaut, non-executive chairman and founder of IBREL.
Under the terms of the agreement, which has been unanimously approved by both boards of directors, IBREL’s shares are being valued at Rs. 92.5 per share, a 25.7 percent premium to today’s closing price.
The proposed merger will be achieved through a cashless scheme of amalgamation. As part of the combination, certain private equity shareholders of Indiabulls Properties Pvt. Ltd, which owns the Sky/Sky Forest residential assets, shall swap their shares to NAM Opco and will eventually merge into IBREL by virtue of a National Company Law Tribunal-approved Scheme of Arrangement, the statement said.
NAM shareholders will get 6.619 shares of IBREL for every 10 shares of NAM whilst NAM Opco shareholders will get 5.406 shares of IBREL for every 10 shares in NAM Opco.
Subsequent to the merger being effected, the resultant listed entity shall be owned around 44.9% by the Embassy Group, 26.2% by the existing public and institutional shareholders, 9.8% by existing IBREL Promoter Group and around 19.1% by BREP and other Embassy institutional investors, the company said in a statement.
Shardul Amarchand Mangaldas & Co. acted as legal advisor to Embassy Group whilst J. Sagar Associates was legal advisor to IBREL.
Allegro Capital Pvt. Ltd and IDFC Securities Ltd acted as financial advisor to Embassy Group.