Anil Ambani-led Reliance Infrastructure (Rel Infra), together with its wholly-owned subsidiary Reliance Defence Systems Limited, on Tuesday announced details of its scheduled open offer to the retail shareholders of Pipavav Defence and Offshore Engineering Co Ltd, through which R-Infra plans to acquire up to 26% of Pipavav.
The open offer is mandatory under the Sebi Takeover Regulations after Rel Infra last week announced it was buying an 18% stake in Pipavav.
Rel Infra said it would offer Rs 66 for each share of Pipavav Defence - which is 7% below the scrip's Tuesday closing price of Rs 61.30 on Bombay Stock Exchange.
According to a filing with Sebi by Rel Infra advisor JM Financial, Rel Infra, along with Reliance Defence, have offered to acquire up to 1,914.1 million fully paid-up equity shares of Pipavav Defence, for a total consideration of Rs 1,263.3 crore. The Rel Infra statement did not mention the dates of the open offer.
On March 5, R-Infra surprised the market by agreeing to purchase 18% equity stake in Pipavav Defence from the promoters at Rs 63 a share, valuing the promoter holding at Rs 819 crore.
The Nikhil Gandhi-promoted Pipavav Defence owns one of India's largest infrastructure facilities that can build ships, submarines and aircraft carriers. Large existing players including M&M and Hero Motors had reportedly evinced interest in buying the company.
"Upon completion of the open offer, the existing promoters will cease to be promoters and Reliance will become the promoter of Pipavav Defence with sole control," the filing, also described as a detailed public statement, said. The open offer will be subject to approval from the Competition Commission of India, the Gujarat Maritime Board and other authorities.
The offer will also depend on conditions such as completion of a debt recase package approved by Pipavav's lenders, Rel Infra's statement to Sebi said.