Nippon Life Insurance Company (Nippon) made an offer to acquire additional 14.7% stake in Reliance Nippon Life Asset Management Limited (NSEI:RNAM) (RNAM) from public shareholders for INR 20.7 billion on May 23, 2019. Nippon will offer to acquire up to 89.95 million shares at the price of INR 230 per share payable in cash. In a concurrent and related transaction, Nippon signed a binding agreement to acquire a 32.13% stake in RNAM from Reliance Capital Limited. Nippon has made an aggregate cash deposit of INR 4 billion. On May 30, 2019, Nippon announced that it will acquire 138.2 million shares representing an approximately 22.49% stake in RNAM for INR 31.8 billion. On July 17, 2019, Nippon announced a revised offer to acquire 155.7 million shares which includes 2.7 million stock options if these get converted on closing at INR 230 each. Upon completion of the offer and related transaction, Nippon shall hold a 75% stake in RNAM. The source of funds for Nippon is internal accruals of INR 36.8 billion. Nippon and Morgan Stanley India Company Private Limited have entered into an escrow agreement with IndusInd Bank Limited in connection with the transaction.
The transaction is subject to receipt of approvals from Competition Commission of India (CCI), Securities & Exchange Board of India, and Bank of India. As on June 7, 2019, there are no statutory approvals required to implement the open offer. The offer is not subject to any minimum level of acceptance. The Securities & Exchange Board of India approved the deal on July 11, 2019. The CCI approved the transaction on July 18, 2019. A committee comprising independent Directors of RNAM advised shareholders to evaluate the offer and take an informed decision about tendering the share. Offer will open on July 16, 2019 and close on July 29, 2019. The offer period was subsequently extended to August 5, 2019. The proceeds will be used in reducing outstanding debt.
Rahul Jain and Satyam Singhal of Morgan Stanley India Company Private Limited served as manager to the tender offer on behalf of Nippon. M Murali Krishna of Karvy Fintech Pvt Ltd. acted as registrar for the offer on behalf of Nippon. Pratik Gupta and Audrius Critchley of Deutsche Equities India Private Limited acted as broker to Nippon.
Khaitan & Co. acted as legal advisor to Nippon Life Insurance Company.