Mumbai, June 3: McGraw Hill Financial Inc, which owns Standard & Poor's with a controlling 52.8 per cent stake in Crisil, today said it will make a voluntary open offer to raise its holding in the largest domestic rating agency to 75 per cent in a deal worth about Rs 1,900 crore.
The deal values Crisil at around Rs 8,600 crore, while after a 20 per cent rally on the bourses the company has a market value of only Rs 8,045 crore today.
McGraw Hill currently owns 52.77 per cent in the Mumbai-based Crisil and plans to acquire up to 15.7 million shares, aggregating to 22.23 per cent equity, through the open offer and will be paid in cash, the US company said in a regulatory filing to the BSE.
McGraw Hill said it would pay Rs 1,210 a share, a premium of almost 20 per cent over the share price on Friday on the BSE at Rs 938.95.
The Crisil counter soared 20 per cent, the maximum daily limit, on the BSE at Rs 1,126.60 or Rs 187.75, whose index Sensex was down over 200 points at 1415 hrs. When contacted, a Crisil spokesperson refused to comment saying they have nothing more to convey beyond the announcement.
The McGraw Hill announcement comes a little over a month after Unilever had said it would pay up to USD 5.4 billion to raise its stake in Hindustan Unilever, to take its shareholding in the largest domestic consumer goods company to 75 per cent. This is the maximum permissible limit under the new public float norms of the market watchdog, Sebi.
In a similar deal in November, England-based GlaxoSmithKline had offered to buy a further 31.8 per cent in its domestic consumer products business for about USD 940 million. That offer ended up lifting the parent's stake to 72.5 per cent, just shy of its 75 per cent target.
Morgan Stanley India will be managing the buyback deal. The open offer will be carried out by McGraw Hill Asian Holdings Singapore, along with S&P India, S&P International, and McGraw Hill Financial Inc, the statement added.
The Crisil offer is expected to begin in July and conclude in early August, the McGraw Hill statement said, adding the company will finance the transaction with existing cash reserves.