IndusInd bank and Bharat Financial Inclusion are close to signing an exclusivity agreement which is likely to be completed by the end of September.
Bharat Financial Inclusion, formerly known as SKS Microfinance, prefers IndusInd bank to acquire the company rather than RBL bank, reported ET Now citing sources. Bharat Financial Inclusion, India’s first listed micro lender, is close to finalizing a buyer in what is likely to be an all-stock deal. According to the channel, the swap ratio is likely to be set at 1.5 shares of Bharat Financial Inclusions for every one share of IndusInd bank. IndusInd bank and Bharat Financial Inclusion are close to signing an exclusivity agreement for its acquisition which is likely to be completed by the end of September.
The implied price is likely be set at 10-12 per cent premium over the prevailing market price of Bharat Financial Inclusion, ET Now said. Bharat Financial shares were trading at Rs 943.25, on Friday morning down by 0.25% since the previous close. The stock hit Rs 966 on Tuesday, a level last seen on 12 November 2010. The stocks of the company have registered a sharp rise in the last one week with returns of more than 7.5% in the period.
There have been talks about the microfinance player looking for a potential acquirer for the last few months. In an interview to CNBC-TV18, Nidhesh Jain, Analyst at Investec Capital Services said that he expects both the stocks to rally post deal. IndusInd bank shares have already returned 54% in the year. In comparison, the BSE Sensex has returned just 18% so far.
Earlier, when the company had said in a press release when there were speculations of a possible deal with Bharat Financial Inclusion ,”The management of the company keeps exploring and evaluating various strategic alternatives including in relation to strategic partnerships, collaborations or restructuring opportunities from time to time and in this regard is engaged in discussions from time to time with various parties and regulators,” amid speculations of a possible acquisition.