Advent, Temasek fall short in bid for control of Crompton Greaves unit

Temasek and Advent launched the takeover bid in May, offering INR104 ($1.56) per share for up to 163 million shares in CGCEL. It was a significant discount to the company's trading price of INR139 at the time, and to the closing price of INR173.70 on September 2. According to a filing, the offer concluded with Advent buying around 22,000 shares and Temasek acquiring none.

The two firms already hold a 34% stake in CGCEL, which they bought from Avantha Group last year for INR66 billion. If successful, the open offer would have seen their interest increase to 60%.

CGCEL is India's leading manufacturer of fans and residential pumps, and produces a wide range of other consumer products, including lamps, water heaters, toasters and irons. It listed on the Bombay Stock Exchange and the National Stock Exchange in May following the divestment by Avantha, the promoter of Crompton Greaves. In its first annual report the company recorded revenue of INR18 billion and profit of INR1.1 billion for fiscal year 2016.

The divestment of CGCEL from Crompton Greaves was one of a series of moves by Avantha over the last two years to reduce the company's debt and focus on its core business. Another such move came earlier this year when Crompton Greaves sold its offshore businesses, including the European, North American and Indonesian divisions of the company's transmission and distribution business, to US-based PE firm First Reserve International for EUR115 million ($126 million).

Last week The Blackstone Group also saw its open offer for Indian IT services provider Mphasis rejected; the firm had planned to pay INR457 apiece for 55 million shares, but only managed to purchase around 2,000 shares. Unlike the CGCEL case, Blackstone had already acquired a majority stake in Mphasis from Hewlett Packard in April. Following the failure of the open offer, Blackstone bought Hewlett Packard's remaining shares, raising its stake in the company to 60%.

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• Topics
• South Asia
• PIPEs
• Industrials
• Buyout
• India
• Advent International
• Temasek Holdings
• manufacturing