Blackstone Group Lp, one of the world’s largest private equity firms, will buy a majority stake in speciality packaging firm Essel Propack, led by Subhash Chandra’s younger brother Ashok Goel. Blackstone has signed to buy 51 per cent of the stake for up to $462 million. Here are the key highlights of the deal:
1. Blackstone has signed a definitive agreement with Essel Propack’s promoter, Ashok Goel, to buy a 51 per cent stake at Rs 134 per share.
2. As per the takeover code, this transaction will trigger a mandatory open offer for the purchase of an additional 26 per cent shares of the company.
3. The price of the open offer has been fixed at Rs 139.19 per share.
4. Depending on the response to the open offer, Blackstone will be spending between Rs 2,157 crore and Rs 3,211 crore ($310-$462 million) for the entire acquisition.
5. Chairman Ashok Goel, who held 57.03 per cent stake in Essel Propack through the Ashok Goel Trust and affiliates as on 31 March, will retain about 6 per cent after the acquisition.
6. Goel will move into an advisory role and will get Rs 80 crore over a five-year period.
7. Goel said that he would use the proceeds from the sale in his group companies such as Essel World, Water Kingdom and the Fun Kingdom.
8. Morgan Stanley acted as the exclusive financial adviser to Goel and his affiliates while PwC, Khaitan & Co and Baker McKenzie acted as advisers. KPMG, Trilegal and Simpson Thacher & Bartlett acted as advisers to Blackstone. JM Financial is managing the open offer.
9. Before Blackstone, French company Albea and Indorama had also reportedly shown interest in buying a stake in Essel Propack.
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