In a long awaited development, Promoters are selling out of VIP Industries.
Piramals have sold 32% stake to a consortium led by Multiples, the Private Equity major. Consortium includes Caratlane founders, Mithun Sancheti and Siddhartha Sancheti.
- Stake has been sold at Rs 388/ share for Rs 1,763 cr. This is at a 15% discount to the previous day’s closing price of Rs 456.55/ share.
- It is an operational sell out and Piramals will no longer run the Company. Operational control will be entirely with Multiples.
- Piramals will have right to appoint one nominee director on the Board.
- Post this sell, Piramals will be left with 20% stake into the Company. As per the agreement, Piramals will bring holding below 10% after 5 years and give up the promoter status. The stake sell then will be at the market price with Multiples having the First Right of Refusal (FROR).
- In line with the regulations, Multiples has also launched an Open Offer to acquire another 26% at the same price of Rs 388/ share.
Reason for the sale are many – succession issues, inability to make it run through a professional manager and overall disinterest in the business. Please check the CNBC interview by Dilip Piramal.