In a sudden turn of events, Minda Corporation on Wednesday announced that it will give up its 15.7% stake in rival Pricol Ltd at a gross price of Rs 343.60 per equity share, effectively exiting the auto component maker.
The transaction translates into approximately Rs 660 crore, resulting in a profit of about Rs 160 crore. The company had acquired this stake at a price of around Rs Rs 400 crore at Rs 208.98 an equity share.
Minda Corporation in a regulatory filing stated that it has sold 1,91,40,342 equity shares of Pricol Limited, representing 15.70406% of the Pricol’s total issued and paid-up equity share capital.
"The sale transaction has been completed. Following the sale, the Company’s equity shareholding in Pricol Limited has become nil" a statement prepared by Minda Corporation revealed.
Last year, Minda Corporation announced its decision to acquire 15.7% stakes worth Rs 400 crore in rival Pricol Ltd. While Minda initially brushed off the move as putting extra money to good use, the market speculated it was a hostile takeover. Pricol had filed an objection with the Competition Commission of India against this planned acquisition.
On January 4 this year, India's competition regulator said that prima facie, the proposed merger by Minda may have adverse on competition and that it intends to conduct further inquiry into the process.