At 12:29 am, the stock was trading over 2 per cent higher at Rs 96.15 apiece on the BSE. Gati, on the other hand, slipped around 3 per cent to Rs 64. In comparison, the S&P BSE Sensex was trading 0.23 per cent lower at 40,685 levels.
Allcargo Logistics (AGLL) at its board meeting on Thursday approved a share purchase agreement (SPA) and a share subscription agreement (SSA) with some of the existing members of the promoter and promoter group of Gati to acquire 19.5 per cent stake in the latter. It also approved an open offer for acquiring 26 per cent of the paid-up voting equity share capital (post preferential issue and vesting of stock option) of GATI at a price of Rs 75/share (14 per cent premium to closing share price).
“The stake buy is a combination of 10 per cent promoter shareholding that will trigger an open offer of 26 per cent and balance will be via preferential shares. This will bring the total deal size to Rs 416 crore,” Shashi Kiran Shetty, founder and chairman of Allcargo Logistics, said on Thursday.
Allcargo Logistics plans to sell some of its non-core assets such as cranes and equipment as part of internal accrual arrangement. Also, the firm is in talks with large private equity and real estate players to dilute its stake in five logistics parks, according to this Business Standard report.
The company has already chalked out a plan to become a majority stakeholder in the express business, he said.
“With acquisition of 10 per cent promoter stake in Gati, we clearly get the management right. The bigger plan is to take controlling stake in the entity in future,” Shetty added.
Commenting on the deal, analysts at Motilal Oswal Financial Services (MOFSL) said MTO (Multimodal Transport Operations) business is likely to perform well over the medium term, led by healthy volume growth. We expect EPS CAGR of 15 per cent over FY19-21. The brokerage values Allcargo at 10x FY21E EPS to arrive at a target price of Rs 30. It maintains 'Buy'.