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IDFC-Shriram merger faces investor concerns; Hindalco eyes Aleris Corp

16 October, 2017

IDFC Ltd is facing resistance from a group of domestic investors on the proposed merger with Shriram Group entities, The Times of India reported, citing people aware of the development.

The disgruntled investors are raising concerns over IDFC’s expertise in running the vehicle finance business and are demanding a better share swap ratio.

The investors feel that the current share swap ratio being offered gives Shriram Group and its investor Ajay Piramal more control over IDFC, the report added.

“If we go ahead with the deal, IDFC wants the best possible swap ratio, which has to be better than what’s on offer,” the report cited one person as saying.

In the current scenario, the government’s stake in IDFC will come down from 17% to around 3% after the merger while that of Malaysian sovereign wealth fund Khazanah’s will reduce from 10% to 2%, according to the report.

Earlier this month, IDFC and Shriram Group extended the merger deadline till 8 November 2017.

In another development, Aditya Birla Group’s aluminium unit Hindalco Industries Ltd is planning to buy US-based Aleris Corp from its private equity investors, The Economic Times reported, citing people aware of the development.

The valuation of Aleris is estimated to be more than $3.1 billion.

The development comes after negotiations between China Zhongwang Holdings Ltd and Aleris hit a roadblock due to national security concerns in the US, the report added.

“The Chinese have set a valuation benchmark. A lot of work has already been done by the Birla team internally. They have been looking at growth options and this is a great target for them. But with the ongoing bilateral talks, there was no way they could’ve formally started work,” the report cited one person as saying.

Meanwhile, Business Standard reported that Mumbai-based textile and apparel maker Raymond Ltd and realty firm Lodha Developers are looking for buyers to sell their office space in Mumbai.

“Raymond is selling 26,000 sq ft of its built-up office space in the Mahindra Towers in Worli area,” the report quoted one person as saying.

Raymond owns two floors in the building, which also houses the headquarters of automobile major Mahindra group. Raymond is believed to be shifting its corporate office to Thane where it has a big office complex. Raymond is likely to receive Rs 65 crore from the sale, the report added.

Lodha has put on block its 76,194 sq ft office property at Lodha Excelus in Mahalaxmi which is valued at Rs 200 crore.

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IDFC-Shriram merger faces investor concerns; Hindalco eyes Aleris Corp

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