Allcargo Logistics gets Sebi nod for open offer to buy 26% in Gati

Multi-modal logistics firm initiates final phase of stake buy in Gati

In the third and final phase to become the controlling stakeholder in express logistics company Gati, Allcargo Logistics on Wednesday said it had received the Securities and Exchange Board of India (Sebi) approval on its open offer to acquire nearly 31.7 million share or 26 per cent stake in Gati at Rs 75 per share. 

Full acceptance of the open offer will take Allcargo’s stake in Gati to 46.83 per cent, marking completion of the acquisition process, which was initiated on December 5, 2019. 

Shares of Gati on Wednesday ended at Rs 66.55 per share on the BSE. Meanwhile, shares of Allcargo Logistics ended at Rs 110.40 per share, up 1 per cent from previous close on the BSE. The open offer is expected to be launched this month and will close in April 2020, the company said.

Allcargo, the multi-modal logistics firm, has already deposited Rs 238 crore, equivalent to 100 per cent of the capital required to fund the open offer, into an escrow account set up according to Sebi norms for the open offer transaction.

 

 

Allcargo also completed the first two phases of the deal comprising preferential share allotment and part purchase of promoter stake in Gati in January. As a part of this process, two directors of Allcargo Logistics have been appointed on board of Gati.

“The acquisition is in line with Allcargo Logistics’ long-term strategy to strengthen its domestic business. It will further synergize our efforts to offer end-to-end services to our domestic and international customers. Apart from helping us consolidate our position as the true end-to-end logistics solutions provider, the acquisition will catapult us into the market-leading position in domestic express logistics segment,” the release said quoting Shashi Kiran Shetty, chairman, Allcargo Logistics.

Operating an asset-light and hub and spoke model, Gati currently has presence in 727 districts in India. While Allcargo Logistics is looking to take majority stake in Gati, the latter has landed in a legal soup over dispute in ownership of the shares within promoter family.

Sons and wife of Gati promoter Mahendra Agarwal, have approached the National Company Law Tribunal (NCLT) against him (Agarwal) for alleged oppression and mismanagement in the company and have sought reconstitution of the board.

The Agarwal family members have approached the Hyderabad Bench of the NCLT seeking tribunal’s intervention in the affairs of the company.