Indian bank M&A is creative fix for both sides

IDFC

15/01/2018 02:43

(The author is a Reuters Breakingviews columnist.  The opinions 
expressed are her own.) 
    By Una Galani 
    MUMBAI, Jan 15 (Reuters Breakingviews) - IDFC Bank is paying 
$1.5 bln in stock for Capital First, a fast-growing consumer 
lender backed by U.S. buyout firm Warburg Pincus. The buyer gets 
a much better retail business and a star CEO. The target gets a 
shortcut to obtaining the bank licence it always wanted. 
 
    Full view will be published shortly. 
    On Twitter https://twitter.com/ugalani 
     
    CONTEXT NEWS 
    - India's IDFC Bank will buy non-bank financial firm Capital 
First in an all-share deal valued at about $1.5 billion. 
    - According to terms of the deal announced on Jan. 13, 
shareholders in Capital First will receive 139 shares of the 
bank for every 10 shares held. Capital First's founder and 
chairman, V. Vaidyanathan, will become chief executive of the 
combined entity. 
    - IDFC Bank was spun off from infrastructure financier IDFC 
Ltd in 2015 and relies heavily on wholesale lending. 
    - Warburg Pincus owns more than one-third of Capital First. 
Other shareholders include Singaporean sovereign fund GIC.  
    - For previous columns by the author, Reuters customers can 
click on  GALANI/    
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BREAKINGVIEWS - Bain may have to rotate Axis to justify $1bln 
bet      urn:newsml:reuters.com:*:nL4N1N70T0 
BREAKINGVIEWS - Indian lender becoming world's biggest little 
bank      urn:newsml:reuters.com:*:nL4N1MZ18W 
India's IDFC Bank to buy Warburg-backed Capital First in $1.5 
bln stock deal     urn:newsml:reuters.com:*:nL4N1P805Q 
Deal terms     http://www.bseindia.com/xml-data/corpfiling/AttachLive/4c62ef53-295a-4125-8263-14828443c58f.pdf 
Press release     http://www.bseindia.com/xml-data/corpfiling/AttachLive/bdc70ed8-62fd-4c87-a0f3-4421ec126134.pdf 
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 (Editing by Quentin Webb and Sharon Lam) 
 ((una.galani@thomsonreuters.com;  Reuters Messaging: 
una.galani.thomsonreuters.com@reuters.net)) 
 
Keywords: CAPITAL FIRST M&A/IDFC BANK BREAKINGVIEWS