KKR to buy 54% stake in JB Chemicals; triggers an additional 26% share purchase opportunity ahead

KKR will acquire the 54% stake in JB Chemicals through subsidiaries like Tau Investments Holdings, Tau Holdco and KKR Asia III Fund Investments.

Jul 03, 2020 12:07 IST India Infoline News Service

After investment in Reliance Industries' Jio Platforms, the American-based global investment firm, KKR, has now found a new interest for India's one of the oldest pharma companies. KKR has decided to acquire a controlling stake in JB Chemicals & Pharmaceuticals.

JB Chemicals intimated exchanges that the Promoter Group members have decided to sell 41,732,332 fully paid-up equity shares having a face value of Rs2 each, representing  54% of the voting capital in the company.

KKR will acquire the 54% stake in JB Chemicals through subsidiaries like Tau Investments Holdings, Tau Holdco and KKR Asia III Fund Investments. These subsidiaries and JB Chemicals promoters have agreed for the acquisition on July 02, 2020.

The stake purchase will be carried at an Rs745 per equity shares in cash. With this, KKR is buying JB Chemicals stake at a premium of over 4.13% each compared to the closing price of Rs715.40 on Thursday.

JB Chemicals told public shareholders on exchanges that, once the Acquirer has acquired 54% (fifty-four per cent.) of the Voting Share Capital, the Sellers have the right (but not an obligation) to sell such number of additional Equity Shares to the Acquirer under the
Share Purchase Agreement subject to certain limits as set out in the Share Purchase Agreement.

This means that the acquisition also opens offer for KKR to acquire additional 20,093,346 equity shares accounting up to 26% stake in JB Chemicals.

KKR's holding as per the share purchase agreement, must not exceed by 65% in JB Chemicals.

At around 12.05 pm, the JB Chemicals stock was trading at Rs719.50 per piece up by 0.57% on Sensex. The stock has touched an intraday high and low of Rs742 per piece and Rs701.45 per piece respectively.

Earlier in May, KKR signed a deal with RIL where the former will invest a whopping Rs11,367cr in the Mukesh Ambani-led telecom arm's Jio Platforms. Buying stakes in Jio makes KKR's largest investment in Asia. The American global investment fund will hold a 2.32% equity stake in Jio Platforms on a fully diluted basis.

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