Moody's to make open offer to raise ICRA stake to 55%

Offers Rs 2,000 per share, 25% premium to closing price

Ratings agency Moody’s on Friday said it would make an open offer to raise its stake in domestic rating agency ICRA from 28.5 per cent to 55 per cent. At an offer price of Rs 2,000 an ICRA share, the offer is valued at Rs 530 crore. The deal values ICRA at about Rs 2,000 crore.

The offer is priced at a 25 per cent premium over ICRA stock’s closing price on Friday on BSE (Rs 1,594.2).

Moody’s plans to acquire up to 2.65 million shares in ICRA, amounting to 26.5 per cent of the company’s equity. The money would be paid in cash, according to Citigroup Global Markets India, which is managing the offer.

This is the second instance of a global company seeking to raise its stake in a domestic ratings agency. In July 2013, McGraw Hill Financial Inc, owner of Standard & Poor’s, had made an open offer to raise its stake in CRISIL from 52.8 per cent to 75 per cent. It had offered a price of Rs 1,210 per CRISIL share; the deal is valued at Rs 1,900 core.

The announcement by an open offer by Moody’s came after the close of trading on stock exchanges. Details of the offer would be made available on or before March 3, Citigroup Global Markets said.

The offer is being made by Moody’s Singapore Pte Ltd, Moody’s Investment Company India Private Ltd and Moody’s Corporation. It is subject to acceptance of at least 2.14 million shares.

On Friday, the CRISIL stock closed 0.4 per cent higher at Rs 1,090.05, while the CARE stock gained 1.38 per cent to close at Rs 858.5.

Moody’s Singapore Pet Ltd along with Moody’s Investment Company India Private Limited and Moody’s Corporation is making offer. Further details of the Offer shall be published on or before March 3, 2014, Citigroup Global Markets said.

This offer is a conditional offer and is subject to a minimum level of acceptance of 2.14 million shares (about 21.5 per cent of the capital.) If the number of shares put in offer is less than 2.14 million shares, the acquirer (Moody’s) shall not accept any Equity Shares tendered, the statement said.