LIC's open offer to purchase shares from minority shareholders of IDBI Bank to begin from 3 December

New Delhi: LIC’s open offer to purchase shares from the minority shareholders of IDBI Bank will kick-start from 3 December, IDBI Bank said on Thursday. The open offer, at Rs 61.73 per equity share, will close on 14 December. LIC has offered to acquire 2,04,15,12,929 equity shares, representing 26 percent of the fully paid-up equity capital of IDBI Bank as per the open offer process in accordance with Sebi regulations, IDBI Bank said in a regulatory filing. The open offer is in connection with the LIC’s acquisition of 51 percent controlling stake in the state-owned IDBI Bank. As per SEBI takeover code rules, an acquirer company has to give an open offer to the shareholders of the target company on acquiring shares or voting rights of 25 percent or more, so that they get an exit route or earn profit by way of selling their equity in the target company. [caption id=“attachment_5313601” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The LIC will buy shares in the open offer at a price of Rs 61.73 per share. As on date, the acquirer (LIC) holds 67,36,20,000 equity shares representing 14.90 percent of the voting rights in target company (IDBI Bank). At a price consideration of Rs 61.73 per equity, assuming full acceptance under the offer for 2,041,512,929 shares (or 26 percent), the total payable by the acquirer (LIC) comes out to be over Rs 126,02.25 crore. LIC said it will pay the shareholders participating in the open offer for selling their stake in IDBI Bank on 31 December. As on date, LIC holds 67,36,20,000 equity shares representing 14.90 percent of the voting rights in IDBI Bank. Last week, LIC had come out with this open offer for buying 26 percent of the equity shares of IDBI Bank from its minority shareholders. The board of the IDBI Bank in its meeting held on 4 October had approved issuance of preferential shares in favour of LIC so that the insurer gets a controlling stake of 51 percent in the bank. The government has already approved the proposal of LIC to increase the stake in IDBI Bank. The bank, in which the government holds 85.96 percent stake, had posted a net loss of Rs 2,409.89 in the quarter ending June 2018. It had a gross non-performing asset (NPA) of about Rs 57,807 crore. Stock of IDBI Bank closed 0.42 percent down at Rs 58.80 on BSE on Thursday.