India's Persistent falls as debt-funded Nagarro acquisition raises EPS concerns
BUZZ-India's Persistent falls as debt-funded Nagarro acquisition raises EPS concerns ** Shares of Persistent Systems PERS.NS fall 1.9% to 5,264.5 rupees
** Company secures an 83.25% stake in Germany-based IT firm Nagarro NA9n.DE, intends to pursue delisting of Nagarro's shares
** "Once ownership exceeds 90%, Persistent may have options under German law to squeeze out the remaining minority shareholders for cash," HSBC says
** Investec says Persistent has funded its Nagarro share acquisition through a $1.6 billion bridge loan with an 18-month tenure
** The brokerage expects any equity raise, including a potential QIP, only after the outcome of the additional acceptance offer becomes clear
** It also estimates that higher debt costs amid global rate hikes could shave roughly 2% off EPS accretion from the deal
** YTD, PERS stock down 15.7%
(Reporting by Abhinav Parmar in Bengaluru)
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