Shareholders okay ICICI-BoR merger; BoR awaits legal view

Clearing the decks, ICICI Bank's general body has approved acquisition of Bank of Rajasthan (BoR), which is awaiting a legal clearance although its shareholders conveyed their consent to the stock exchanges.

In an unusual development, the BoR shareholders had voted yesterday after the bank management summarily called off the meeting citing a stay by a Kolkata civil court, which ICICI Bank got vacated.

While the shareholders of BoR communicated their decision to the stock exchanges, saying the "scheme of amalgamation has been duly passed by the required majority", BoR officials maintained throughout the day that they would approach stock exchanges only after getting the decision legally validated.

 

BoR's Managing Director and CEO G Padmanabhan said the bank has sought legal opinion on the matter, adding that the bank is in touch with the Reserve Bank about the developments.

ICICI Bank said in a separate statement that its shareholders have approved the merger at the company's Extraordinary General Meeting in Vadodara yesterday.

Shares of BoR settled nearly 1 per cent up at Rs 176.15 a piece, while that of ICICI shed 0.87 per cent to close at Rs 893.15 a share.

The integration would help ICICI Bank increase its branch network by 25 per cent to about 2,500 across the country. It will give great visibility to ICICI Bank in western and northern parts of the country.

Currently, ICICI Bank has about 2,000 branches while BoR has 463 spread across the country.

Post merger, the balancesheet of ICICI Bank would cross Rs four lakh crore. BoR has a total business of over Rs 23,000-crore, as against nearly Rs 3,84,000-crore of ICICI Bank. BoR's turnover was Rs 1,507-crore in 2008-09, while that of ICICI Bank in 2009-10 was over Rs 33,000-crore.

ICICI Bank last month agreed to take over Bank of Rajasthan in a share-swap deal that valued the Udaipur-based bank at over Rs 3,000-crore.

The share swap ratio was fixed at one ICICI Bank share for every 4.72 shares of BoR.