Edelweiss goes back on deal with Religare
Mumbai: The Edelweiss group on Friday said it is no longer interested in acquiring the securities business of Religare Enterprises.
In a regulatory filing to stock exchanges, Edelweiss Financial Services said it is not proceeding with the deal since Religare has been unable to obtain requisite clearances.
"Due to the seller's inability to obtain the requisite clearances within the agreed timeline, the binding arrangement has come to an end on March 15, 2018," Edelweiss Financial Services said.
The announcement led to the shares of both Edelweiss Financial Services and Religare Enterprises ending in the red. While the Edelweiss share settled lower by 1.57 per cent on the BSE, the Religare scrip was down almost two per cent at Rs 57.05.
In December last year, the Edelweiss group's wealth management unit had said it would acquire the Religare Securities business for an undisclosed sum.
Edelweiss had then said that its wealth management arm was always on the lookout for synergistic growth opportunities and expansion, particularly for its asset and wealth management businesses and the acquisition was a proper fit given this objective.
The group had earlier also grown through the inorganic route, by acquiring firms such as Rooshnil Securities (2001) and Anagram Capital (2010).
Had the deal with Religare gone through, around 1,250 points of presence, including over 90 branches, and over 1 million clients would have come within the Edelweiss fold.
In a filing to stock exchanges, Religare had then said the total consideration for the business will be an amount equivalent to its adjusted net worth and a premium as agreed between the two parties.
As on March 31, 2017, the retail broking business of Religare had recorded revenues of Rs 412 crore and a net worth of Rs 140 crore. It accounted for around 11 per cent of the consolidated revenues.