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Authum Investment and Mahi Madhusudan Kela will acquire 46.85% of Prataap Snacks for ₹846.6 crore. The deal triggers a mandatory open offer for another 26% equity at ₹864 per share.
Authum Investment and Infrastructure, in partnership with Mahi Madhusudan Kela, have initiated plans to acquire a controlling 46.85% stake in Prataap Snacks. This significant deal involves purchasing 1.13 crore shares from the company's private equity promoters, including Peak XV Partners and Sequoia Capital. The total value of the acquisition is pegged at ₹846.6 crore, with the shares priced at ₹746 each.
Once the acquisition is complete, Authum Investment will hold a 42.31% stake in Prataap Snacks. This move has triggered a mandatory open offer under SEBI regulations, where the acquirers plan to purchase an additional 26% of the company’s equity. This open offer involves 62.98 lakh equity shares at ₹864 per share, amounting to ₹544.17 crore.
The private equity stake acquisition is priced at ₹746 per share, which reflects a 30% discount from the recent closing price of Prataap Snacks on Thursday. However, the open offer price of ₹864 per share is still slightly lower than the recent market surge. Prataap Snacks’ stock price saw a 20% rise on Thursday, but despite this, the stock has underperformed in 2024, having declined by 4.5% so far.
Following the acquisition, Prataap Snacks will continue to remain a publicly listed entity. The acquirers do not intend to de-list the company’s stock, as highlighted in exchange filings. Through his fund, Madhusudan Kela already holds a 2.8% stake in the company, along with other prominent public shareholders, including Malabar India Fund and Bandhan Mutual Fund.
This acquisition by Authum Investment and Mahi Madhusudan Kela represents a strategic move to enhance their portfolio by entering the snack industry. The transaction strengthens their influence in Prataap Snacks, while keeping the company publicly listed.
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