India's ICICI Securities gets shareholder nod to delist, setting up merger with ICICI Bank

ICICI Securities

28/03/2024 03:32

BENGALURU, March 28 (Reuters) - India's ICICI Securities
 ICCI.NS  has secured shareholders' nod to delist its stock, the
brokerage said in the early hours of Thursday, paving the way to
merge with parent and majority shareholder ICICI Bank  ICBK.NS .
    About 71.9% of the brokerage's minority shareholders voted
in favour of delisting, exceeding the regulatory requirement of
a two-thirds majority for a resolution to pass.
    Among public institutional investors, which own a total
16.68% in the company, 83.8% voted in favour of the delisting,
while only 32% of non-institutional public shareholders, who
hold 8.55% in the company, were in favour.
    Norges Bank Investment Management, which holds a 3.2% stake
through one of its funds, making it the largest public
shareholder in ICICI Securities, has previously said it voted in
favour of the deal.
    ICICI Bank holds a roughly 75% stake in the brokerage and
its vote is not considered. It said last June it would buy the
remaining 25% in a share-swap deal and its stock has jumped 16%
since then, raising the implied offer price to about 726 rupees
as of Wednesday's close.
    At this rate, ICICI Bank would pay about 59 billion rupees
($707.9 million) for the stake.
    Still, the offer price is roughly 2% less than ICICI
Securities' last close of 741.70 rupees, which has irked some
minority investors.
    Quantum Asset Management, which has a 0.21% stake in ICICI
Securities and voted against the deal, estimates the offer price
should be around 940 rupees per share, even based on the lowest
multiple among the company's listed peers.
    "The dynamics have changed since they announced the
delisting. Ideally they should have withdrawn the offer and come
up with a revised offer, which has not happened," said George
Thomas, an associate fund manager at Quantum Asset.
    The delisting will draw the curtain on ICICI Securities'
six-year run as a public company, during which its stock price
has risen about 43%. Of that, it rose a mere 8% over the first
five years, but has zoomed since the plan was proposed.
    ICICI Bank's stock has jumped four-fold in this six-year
period.

 ($1 = 83.3360 Indian rupees)

 (Reporting by Navamya Ganesh Acharya, Chris Thomas and Hritam
Mukherjee in Bengaluru; Editing by Varun H K)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330))