ICICI, BoR boards approve merger through share swap deal

In a major acquisition in the country's financial services industry, the Boards of country's second largest lender, ICICI Bank and troubled-Bank of Rajasthan today approved the merger of two entities by way of a shareswap deal that values BoR at about Rs 3,000 crore.

In a major acquisition in the country's financial services industry, the Boards of country's second largest lender, ICICI Bank and troubled-Bank of Rajasthan on Sunday approved the merger of two entities by way of a shareswap deal that values BoR at about Rs 3,000 crore.

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"The Board (of BoR) has approved the share swap ratio of 1:4.72. The proposal would now be taken up in an Extra Ordinary General Meeting on June 21," Bank of Rajasthan's RBI-appointed Managing Director and CEO, G Padmanabhan told reporters after the board meeting here on Sunday.

The proposal entails BoR shareholders to gain one ICICI Bank share for every 4.72 shares they held. ICICI Bank MD & CEO, Kochhar said the deal "is a win-win situation for the shareholders" but the Tayal family would not get a seat on the board of the resultant entity.

BoR's shareholder P K Tayal, who hitherto had close to 55 per cent stake in the bank said he was expecting a better valuation for the deal but respects the decision of boards of both banks.

"I was expecting a better valuation because the bank is a gold mine. But as both boards have approved the valuation, I only respect the decision," Tayal said.

On Saturday, Tayal had sought one ICICI share for every three held by BoR shareholders saying as the deal is a "lottery for ICICI Bank' given its strength in business and the promoters deserved a better valuation.