Swap ratio should be at least 1:3, says Tayal

With ICICI Bank and Bank of Rajasthan (BoR) slated to hold board meetings tomorrow to decide on the share-swap ratio for a merger of the two entities, BoR promoter P K Tayal today pitched for a better valuation than ICICI Bank’s present offer for his stake in BoR.

“They (ICICI Bank) have got a lottery. I believe that it is a (good) deal for them. We are definitely looking for a better valuation. It should be a minimum 1:3,” Tayal said.

Earlier this week, the boards of both the banks gave in-principle approval for the merger, and jointly appointed accounting firm Haribhakti & Co to arrive at the valuation.

ICICI Bank offered 25 shares for every 118 shares of BoR (or a swap ratio of 1:4.72) held by the Tayal family. Under the share-swap ratio, the Tayal group will receive 18.8 million ICICI Bank shares for its 88.8 million BoR shares.

According to a senior BoR official, the bank’s board is likely to argue for a better valuation at tomorrow’s meeting and also discuss issues pertaining to safeguarding the interests of its 3 million customers and nearly 4,000 employees.