PE players to acquire 26 per cent in Jyothy Laboratories
05 May 2011
A global private equity giant is likely acquire at least 26 per cent in the Mumbai-based detergent maker Jyothy Laboratories for about $150 million (Rs667 crore) which would trigger an open offer to minority shareholders, The Times of India reported.
Jyothy Labs, which about to buy Henkel India, has discussed placement of shares at a price over Rs300 per share the report said. The PE investor is likely to acquire 15 per cent through preferential allotment and make the mandatory open offer for an additional 20 per cent at a similar price, the report citing source directly involved with the process said.
The company may partner with the PE investor for the next phase of growth as also to bring about a turn around of the troubled operations at Henkel. Jyothy is also looking to retire the Rs600 crore loan it raised from Kotak Mahindra Bank to clinch the Henkel India buyout. The M P Ramachandran led promoters would hold a minimum 51 per cent stake (down from the current 63 per cent) following the equity transaction, which is to be finalised in three to four months.
The PE investors in the fray are Bain Capital, Carlyle Group, TPG Capital and Apax Partners. The deal could be one of the biggest PE deals in India's fast moving consumer goods (FMCG) industry.
According to the report, a crucial board meeting of the company would be held today to discuss PE fund-raising plans, as also the Henkel India buyout which is expected anytime.
Although Jyothy has sought an all-time high stock price of Rs330 per share from PE investors, analysts say the deal would likely go through at around Rs300 per share. Though Apax Partners made the first approach for a potential deal in January this year it has been challenged by its global peers who have made attractive offers.
Jyothy has already acquired a 14.9-per cent stake in Henkel India from A C Muthiah of Spic and is to announce acquisition of Henkel AG's 50.97 per cent stake at Rs 20 per share. Jyothy's board is meeting today to discuss the Henkel buyout.
The deal would see Henkel AG sell its detergent and personal care brands such as Henko, Mr White, Margo, Chek and Neem Active. Its two international brands Fa and Pril would be licensed with royalty payments.
