Blackstone falls short in bid to delist India's R Systems
The Blackstone Group has failed to delist Indian IT provider R Systems due to insufficient interest from public shareholders six months after agreeing on a majority acquisition.
In November, the private equity firm announced it would acquire a 51.67% stake for INR 29.04bn (USD 354m) from the founder and promoters, paying INR 245 per share. A full delisting was conditional on securing a further 38.33% from public shareholders.
The open offer secured tenders from only 11.4% of public shareholders despite Blackstone lifting the price from INR 246 to INR 262, according to a filing. As per terms agreed in November, Blackstone is now launching a separate offer to acquire up to 26% from public shareholders at the base price of INR 245 per share.
The stock has zigzagged between INR 244 and INR 253 since May 8, when the shortfall of the original open offer was announced. It closed on May 12 at INR 247.5, on par with the closing price on May 8 and up about 5% from mid-November, prior to Blackstone’s initial approach. This indicates a market capitalisation of INR 29.28bn.
R Systems specialises in product engineering for digital IT services, with competencies covering artificial intelligence, data analytics, the internet of things, robotic process automation, and cloud. It has a presence in North America, Europe, and Asia, including India.
Revenue increased 31% during the 2021 calendar year to USD 156.5m while EBITDA climbed 39% to USD 21.9m and net profit increased 73% to USD 19.2m. Blackstone said revenue for the 12 months to September 2022 was USD 189m, up 36% year-on-year.
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