1. IIFL soars 10% on Fairfax India’s open offer to raise stake by 26%

IIFL soars 10% on Fairfax India’s open offer to raise stake by 26%

Canada-based insurance and investment company, Fairfax Holdings owned by Canadian billionaire Prem Watsa, on Tuesday announced its plan to increase its stake in Indian diversified financial services firm IIFL Holdings

By: | Mumbai | Published: July 15, 2015 12:11 AM

Canada-based insurance and investment company, Fairfax Holdings owned by Canadian billionaire Prem Watsa, on Tuesday announced its plan to increase its stake in Indian diversified financial services firm IIFL Holdings, according to a stock exchange filing.

IIFL’s stock ended up 10.13% or R19.05 to end at R207.05, before gaining 20% intraday. More than 71.97 lakh shares were traded on the BSE and NSE, up 67.89 times its 30-day average volume of 1.06 lakh shares.

Fairfax, through its Indian and Mauritian subsidiaries, has offered to acquire a little over 8.31 crore shares in IIFL at R195 per share through an open offer, for a total consideration of R1,621.01 crore, valuing the company at around R6,400 crore.

ICICI  Securities is the sole manager to the offer.

The success of the offer will help the Prem Watsa-controlled Fairfax to increase its stake to more than 40%. At present, Fairfax owns 14.21% stake in the Indian financial services firm including the 5.24% stake it owns through derivatives instruments.

The open offer is expected to close later this year subject to regulatory approvals in India. IIFL-owned and controlled by Nirmal Jain along with other owners holds 29.77% of IIFL Holdings, according to the latest stock exchange filings.

In an interview with a TV channel, Jain said that Fairfax will neither have control over the company nor will it participate in the management. “It is not that they (Fairfax) are going to participate in the management or have a control in the company,” Jain said in a television interview following the open offer.

Fairfax India Holdings, the $1 billion fund created by Toronto-based investor Prem Watsa, is seeking to make at least six investments in India and will target infrastructure, consumer services, retail and exporting industries, according to the stock exchange filing.

The fund, which started trading in Toronto in January, is seeking to gain “significant influence” or control through its holdings, which can include bets on publicly listed companies, the filing said.

IIFL reported revenue of R3,653 crore and net profit of R476.36 crore for the financial year ended March 2015, according to stock exchange data. IIFL operates businesses in non-banking finance, housing finance, wealth management, retail broking, institutional equities, investment banking and insurance distribution.

Fairfax seeks to hike India footprint
* Fairfax, through its Indian and Mauritian subsidiaries, has offered to acquire a little over 8.31 crore shares in IIFL at R195 per share for a total consideration of R1,621.01 crore
* The success of the offer will help Fairfax to increase its stake to more than 40%. At present, Fairfax owns 14.21% stake in the Indian financial services firm including the 5.24% stake it owns through derivatives instruments
* The open offer is expected to close later this year subject to regulatory approvals in India

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