IDBI Bank Ltd. said Life Insurance Corporation of India's open offer to purchase shares from the public shareholders of the state-run lender will kick off on Dec. 3.
The offer to buy shares at Rs 61.73 apiece will close on Dec. 14. LIC has offered to acquire 204.15 crore equity shares, representing 26 percent stake in IDBI Bank as per the Securities and Exchange Board of India's regulations, the lender said in a regulatory filing. LIC in all plans to acquire 51 percent controlling stake in the bank.
As per SEBI's takeover code, an acquirer has to give an open offer to the shareholders of the target company on buying shares or voting rights of 25 percent or more. This is so that they get an exit route or earn profit by way of selling their equity in the target company.
LIC said it will pay the shareholders participating in the open offer on Dec. 31.
The board of the IDBI Bank, in its meeting held on Oct. 4, had approved issuance of preferential shares to LIC so that the insurer gets a controlling stake. The government has already approved the proposal.
The bank, in which the government holds 85.96 percent stake, posted a net loss of Rs 2,410 crore in the quarter ended June 2018. It had gross non-performing assets of about Rs 57,807 crore.
Shares of IDBI Bank closed 0.42 percent lower today.
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