The Telegraph
Thursday , May 29 , 2014
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Moody’s ups Icra offer price

Mumbai, May 28: Moody’s today raised its open offer price for Icra to Rs 2,400 per share.

The offer for 26.5 per cent of Icra was made by Moody’s Corporation, the parent of global credit rating agency Moody’s Investors Service.

The share price of Icra, which is engaged in credit rating of mainly Indian companies, rose nearly 18 per cent on the BSE today.

Moody’s Corp had in February announced the open offer as part of its plan to acquire a majority stake in Icra. Moody’s now holds a 28.51 per cent in Icra through Moody’s Investment Company India Pvt Ltd.

It had then set a price of Rs 2,000 per share to acquire 26.50 lakh shares of the domestic credit rating agency.

However, Citigroup — the managers to the offer — today said Moody’s had revised the offer price to Rs 2,400 per share. The parent will have to shell out Rs 636 crore if the open offer is fully subscribed. In such a case, Moody’s stake will rise to 55 per cent. At the earlier price, Moody’s would have had to stump up Rs 530 crore.

The offer is subject to a minimum level of acceptance of 21.49 lakh shares, representing 21.5 per cent of the company’s voting share capital.

The revised offer price is a premium of 20 per cent to the closing price of the Icra share on Tuesday.

The announcement led to the Icra scrip soaring 17.61 per cent, or Rs 352.10, to end at Rs 2,352.10 on the BSE. During the day, the share rose 20 per cent to Rs 2,400 — its one-year high. On the NSE, the stock soared 17.73 per cent to Rs 2,355.

“The revised price reflects Moody’s intention to see that the open offer is successful. However, with the current market price already close to the open offer price, it remains to be seen how many shareholders tender their holdings,” an analyst said.

At present, foreign institutional investors hold 15.33 per cent in Icra, domestic institutions hold around 36.19 per cent, while the rest is owned by others.

Apart from ratings, the Icra group is present in consulting and IT-based information and outsourcing services.