Castrol India up 4% after Motion JVCo, Stonepeak, & CPPIB makes open offer

The buying on the counter came after Motion JVCo Limited, together with Stonepeak Motion Holdco Limited and CPP Investment announced an open offer to acquire up to 26 per cent equity of Castrol India

Castrol India shares rose 4.4 per cent on BSE, registering an intra-day high of ₹197.95 per share. The buying on the counter came after Motion JVCo Limited, together with Stonepeak Motion Holdco Limited, Stonepeak Infrastructure Fund V Cayman (AIV I) LP, Stonepeak Infrastructure Fund V (Lux) (AIV I) SCSp and CPP Investment announced an open offer to acquire up to 26 per cent equity of Castrol India.

 

At 9:45 AM,  Castrol’s share price was trading 3.24 per cent higher at ₹195.75 per share on BSE. In comparison, the BSE Sensex was up 0.24 per cent at 85,206.57. The company has a total market capitalisation of ₹19,362.07 crore. Its 52-week high was at ₹252, and its 52-week low was at ₹162.8. 

 

The offer is being made to all public shareholders (excluding the promoter group and other specified parties) and could amount to a payout of about ₹4,990 crore at the initial offer price, subject to final pricing and full acceptance. The ₹194.04 per share is defined as the initial offer price.  ALSO READ: Stock Market LIVE: Sensex drops 200 pts |  IEX slips , stock nears 52-week low; here's why  

  "With respect to the captioned subject, an Open Offer is being made for acquisition of up to 25,71,71,820 (twenty five crore seventy one lakh seventy one thousand eight hundred and twenty) fully paid-up equity shares of face value of ₹5/- (Indian Rupees five only) each ("Equity Shares") representing 26 per cent (twenty six percent) ofthe Equity Share Capital of the Target Company from the Public Shareholders of the Target Company at a price of ₹194.04/- (Indian Rupees one hundred and ninety four and four paise only) per Equity Share by Motion JVCo Limited (the "Acquirer") along with Stonepeak Motion Holdco Limited ("PAC l"), Stonepeak Infrastructure Fund V Cayman (AIV I) LP ("PAC 2"), Stonepeak Infrastructure Fund V (Lux) (AIV I) SCSp ("PAC 3") and CPP Investment Board Private Holdings (6) Inc. ("PAC 4", and along with PAC 1, PAC 2 and PAC 3, "PACs"), in

their capacity as persons acting in concert with the Acquirer for the purpose of the Open Offer," the filing read," the filing read. 

 

This development comes after British Petroleum (BP) reached an agreement to sell a 65 per cent shareholding in Castrol to Stonepeak for about $6 billion.

 

The deal announced values Castrol at $10.1 billion, and marks the British company's most ambitious asset sale so far in its efforts to streamline operations and scale back its renewable energy investments after years of lagging rivals in share performance.

 

BP will retain a 35 per cent stake in a new joint venture with Stonepeak, which it can sell after a two-year lock-in period.

 

The transaction is expected to result in total net proceeds to BP of approximately $6 billion, which includes around $0.8 billion for the pre -payment of future dividend income over the short to medium term on BP’s retained 35 per cent stake and other adjustments. The implied total equity value of Castrol is $8 billion after deducting joint venture (JV) minority interests totaling $1.8 billion, and other debt-like obligations of around $0.3 billion.  

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Upon completion of the transaction, a new joint venture will be incorporated, comprising 65 per cent Stonepeak and 35 per cent BP ownership, according to filing.