A proposed move by Piramal Finance and Zurich Insurance to form a joint venture to bid for debt-laden Reliance Capital’s (RCap) 51% stake in its general insurance subsidiary has been called off. The companies decided not to go ahead with forming a JV due to differences on various issues such as the shareholders’ agreement and valuation.
In the first round, both the companies submitted separate non-binding bids for Reliance General Insurance Company (RGIC). Later, they decided to form a joint venture and place a joint bid, which has now been called off, sources close to the development said.
There were three bidders in the race for RGIC – Piramal Finance, Zurich Insurance and Advent International. In the first round, Advent had submitted the highest non-binding bid of Rs 7,000 crore, which was almost double the amount offered by other two bidders. Piramal had placed a bid of Rs 3,600 crore while that of Zurich was at Rs 3,700 crore.
US private equity investor Advent has backed out from bidding for RGIC, which came after the company submitted a binding bid. Advent, at the time of submitting of non-binding bids, had “over-bid” for the company, according to a source.
Earlier, Aditya Birla Sun Life and Nippon Life of Japan had engaged in merger talks to jointly bid for Reliance Nippon Life Insurance. Those talks also failed due to differences on multiple issues.
Separately, a number of bidders of RCap have sought an extension to the November 28 deadline to submit binding bids for the former Anil Ambani group company.
Bidders, including Piramal Enterprises and Torrent Group, want the deadline to be extended to December 16. Oaktree Capital and Torrent Group want it to be extended to December 23.