Mahindra & Mahindra (M&M), the country’s largest tractor company, has turned out to be the winner in the Punjab Tractors stake sale. M&M will shell out Rs. 360 per share for a 43.5% stake, valuing Punjab Tractors at around Rs. 2200 crores. M&M will end up paying a total consideration of a little over Rs. 951 crores in an all-cash deal to buy out private equity firm Actis and the Burman family of Dabur from Punjab Tractors. Actis will gross Rs. 634 crores from the sale of its 29% in Punjab Tractors, while the Burman family will get around Rs. 317 crores for its 14.5% stake.
The final round of bidding boiled down to a contest between M&M and Ashok Leyland. Initially, Ashok Leyland was known to have offered Rs. 320 per share of PTL while M&M was said to have made offers in the range of Rs. 330-335 per share. M&M also offered a part-cash, part-stock option but finally clinched the deal when it upped its all-cash offer to Rs 360 per share. M&M will now have to make an open offer to buy an additional 20% in Punjab Tractors, as per SEBI regulations.
Read the article in The Economic Times.
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