Tata group will acquire a controlling stake in Tejas Networks Ltd, through a combination of outright share purchases, issue of warrants and an open offer.
Tata Sons, which is the holding company of the group, will get 43.3% stake through preferential issue of shares and convertible warrants for 18.5 bln rupees. It has also made an open offer to acquire another 26% stake in the telecommunication equipment maker.
Under the deal, Tejas Networks will make preferential allotment of 19.4 mln equity shares, 36.82 mln Series A warrants and 15.5 mln Series B warrants to subsidiaries of Tata Sons. The preferential allotment, as well as the conversion of warranty and the open offer, will be at 258 rupees per share.
Shares of Tejas Networks jumped on the announcement and at 1158 IST were trading 5% higher at 244.35 rupees on the National Stock Exchange.
Kotak Mahindra Capital Co Ltd will act as the manager to the open offer and Khaitan & Co as the legal advisor to the transaction.
The board has also approved acquisition of up to 1.3 mln shares of Tejas Networks from certain personnel in management, at 258 per share.
Tejas Networks will utilise the proceeds to invest organically and inorganically in research and development, sales and marketing, people, infrastructure and to enhance its manufacturing and operational capabilities.
Source : Eureka
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