Japan’s Asahi Glass, which owns a little over 22% of Asahi IndiaBSE 3.68 % Glass, is in advanced discussions to buy out partner Sanjay Labroo as part of a plan to take control of the joint venture, two people familiar with the matter said.
Labroo and his family own an equal 22.21% stake in the local auto glass manufacturing venture. Maruti SuzukiBSE 0.36 % owns a little over 11%, which it will continue to hold, the people said.
“After a protracted negotiation of over nine months, Asahi is likely to pay about Rs 2,500 crore to buy out Labroo and his family members, valuing the company at about Rs 12,500 crore,” said one of the people.
“The deal is expected to close at between Rs 475 and Rs 525 per share. This is at a significant premium to the price of Rs 180 a share late last year when the discussions had started,” he added.
On Thursday, the stock closed 2.7% lower at Rs 404.50 on the BSE. Under the proposed deal, after buying out Labroo’s stake, Tokyo headquartered Asahi Glass would make an open offer for another 26% that, if fully subscribed, would cost another Rs 3,000 crore, the second person said.
In the past month, Asahi India’s shares have gained more than 30% in anticipation of a transaction. Its current market capitalisation is Rs 9,833 crore. An Asahi India spokesperson strongly denied the news.
The company denied any such development in stock exchange filings too. But, according to the people ET spoke to, the transaction that is likely to complete in December or early 2018 will cost the Japanese major about Rs 5,500 crore, including the open offer. Once completed, this will probably be the largest investment in the auto ancillary sector by an individual company, said an investment banker in the know.
