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Areva Sale May Trigger Open Offer For India Arm

01 December, 2009

Power equipment and systems company Areva, which has short-listed Alstom/Schneider combine to sell its global transmission & distribution business, will result in a selloff for Areva T&D India as well and would trigger an open offer for the minority shareholders in India.

According to a statement issued on Tuesday, Alstom/Schneider pipped GE and Toshiba/INCJ to win the bid for T&D business of Areva for € 2.29 billion in equity or € 4.09 billion in enterprise value.

Incidentally, Areva T&D India in which Areva holds 72% stake itself has a market cap of Rs 7,150 crore ($1.5 billion or €1.02 billion). For acquiring another 20% stake in Areva T&D India (which would in effect be a delisting offer), Alstom/Schneider combine would need to shell out another € 200 million, approximately.

The Areva stock was up 3% and was trading at Rs 300 after the announcement. For the year ended December’08, Areva T&D had top line of Rs 2,826 crore with net profit of Rs 244 crore. It had reserves of over Rs 600 crore for 2008.

Among those interested in bidding for the business included India’s Avantha Group which has power sector equipment exposure through Crompton Greaves. The group, which is led by Gautam Thapar, felt that the asking price was too high and the process of sale was too complicated as it called for a collaborative bid with a partner. Avantha didn’t move ahead during the bidding process.

 


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Areva Sale May Trigger Open Offer For India Arm

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