Exide Industries Limited to divest stake in Insurance Business to HDFC Life for Rs. 6687 crore

The Board of Directors of Exide Industries Limited (Company) at its meeting held today, has considered and subject to the approval of its shareholders, approved the divestment of the Company's entire equity shareholding in Exide Life Insurance Company Limited, a material wholly owned subsidiary of the Company, by way of sale to HDFC Life Insurance Company Limited (HDFC Life / Purchaser).

The total investment of the Company in Exide Life, a material wholly owned subsidiary of the Company, as on date is INR. 1679.59 crore (Indian Rupees one thousand six hundred seventy nine crore and fifty nine lakh). It is proposed to divest the entire equity shareholding held by the Company in Exide Life by way of sale to HDFC Life Insurance Company Limited (Purchaser), for an aggregate consideration of INR 6,687 crore (Indian Rupees six thousand six hundred eighty seven crore), which is proposed to be discharged by way of: (i) payment of INR 725,97,77,930 (Indian Rupees seven hundred twenty five crore ninety seven lakh seventy seven thousand nine hundred thirty) as cash consideration, and (ii) issuance of 8,70,22,222 (eight crore seventy lakh twenty two thousand two hundred twenty two) equity shares of the Purchaser to the Company at a price of INR 685 (Indian Rupees six hundred eight five) per equity share.

The consideration for the Proposed Transaction has been determined based on the (i) valuation report in relation to the shares of the Purchaser and Exide Life prepared by Deloitte Touche Tomhatsu India LLP and Desai Haribhakti & Co., each independently appointed by the Purchaser and Company, respectively, (ii) valuation report in relation to the shares of the Purchaser and Exide Life prepared by Ms Rashmi Shah and Mr S Sundararaman, each a Registered Valuer independently appointed by the Purchaser and Company, respectively, and (iii) fairness opinion issued by Mis Ambit Private Limited (a SEBI registered merchant banker), appointed by the Company. The valuation reports and the fairness opinion were also reviewed by the Audit Committee, and the Audit Committee confirmed that the consideration for the Proposed Transaction is fair and recommended the same to the Board. The Board reviewed and noted the recommendation of the Audit Committee.

The Proposed Transaction is likely to enhance the value for the shareholders of the Company.

Shares of Exide Industries Ltd., was last trading in BSE at Rs. 178.25 as compared to the previous close of Rs. 170.25. The total number of shares traded during the day was 2369981 in over 31383 trades.

The stock hit an intraday high of Rs. 180.5 and intraday low of 168.65. The net turnover during the day was Rs. 418073170.

Shares of HDFC LIFE INSURANCE COMPANY LIMITED was last trading in BSE at Rs. 758.8 as compared to the previous close of Rs. 719.5. The total number of shares traded during the day was 1364064 in over 35917 trades.

The stock hit an intraday high of Rs. 775.65 and intraday low of 719.8. The net turnover during the day was Rs. 1024122912.

Source : Equity Bulls

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