Unitech Ltd is planning to buy out a group offshoot Unitech Corporate Parks Plc(UCP) that is listed on the AIM stock exchange in a deal that may cost it £106.5 million or about Rs 776 crore. Unitech already owns 4.52% of UCP with promoters owning a further 0.22% of the London-listed firm.
Unitech disclosed that in connection with the demerger of its infrastructure business into Unitech Infra Ltd, the firm has been considering a possible offer for UCP that owns the majority interests in the corporate park assets in which entities within the Unitech Group act as project manager, investment manager and investment adviser and also own the residual interests.
"Unitech has made an approach and is currently discussing with the independent directors of UCP a possible offer for UCP from the Unitech Group. Under the terms of the possible offer, consideration would comprise 31 pence in cash in respect of each UCP share," it said in a regulatory filing.
UCP has total issued capital base of 360 million shares and for acquiring the balance 95% odd stake, Unitech would need to shell out around $166 million. The company’s proposed offer to buy out the shares represented a premium of 22.8% to the closing middle market price of 25.25 pence per UCP share on July 26, 2010.
UCP shares have shot up after Unitech made the offer and last traded at 29.25 pence or over 10% compared to Tuesday’s price.
The top five shareholders of UCP include ABN Amro (20.7%), HSBC (15.9%), Roveda Holdings (9.2%), Morgan Stanley Securities (7.4%) and Capital (5%). UCP had raised around £360 million through an AIM listing in December 2006.
UCP's business strategy involves investing in commercial real estate in India which is being developed specifically for IT and ITES sectors. Unitech owns the residual interest in all the UCP assets except in Unitech Hi-Tech Structures Ltd where third parties hold 4%, UCP holds 60% and Unitech Ltd holds 36%. Its seed portfolio projects comprise six IT or ITES related projects, five of which are located in the National Capital Region besides one which is located in Kolkata.
Acquisition of UCP will bring revenues from all these assets under its consolidated numbers.