ICICI needs approval of Govt for BoR buy
Sebi, RBI clearance must
Ahead of the crucial meeting of the ICICI Bank board to approve the takeover of Bank of Rajasthan (BoR) on Sunday, industry ministry sources have said the former would need government clearance for the deal.
“It is obvious that ICICI Bank will have to take the Foreign Investment Promotion Board (FIPB) approval as they are foreign-owned bank,” official sources in the industry and commerce ministry said.
ICICI Bank had announced last week that it would take over the troubled Bank of Rajasthan and called a board meeting on Sunday to consider the valuation report and approve the amalgamation of BoR. The ICICI board will also approve the share swap ratio for the merger.
BoR and ICICI Bank had appointed accountancy firm Haribhakti & Co to assess the value of the BoR. Sources further said besides the FIPB, ICICI Bank would also have to obtain regulatory clearances from RBI and Securities and Exchange Board (Sebi).
For foreign investment approval, ICICI can directly approach the FIPB or RBI can refer the case to the government.
Following the new foreign investment guidelines issues through Press Note 3 in February 2009, ICICI Bank has become a foreign-owned, Indian-controlled bank as the overseas equity in the bank is over 65 per cent.
The Bank had earlier indicated a swap ratio of 25:118. It would mean that ICICI Bank will offer 25 shares for every 118 shares of BoR. Post-merger, the Tayal family, which according to Sebi holds 55 per cent equity, would exit BoR.
Press trust of India
Promoters seek better valuation
Unsatisfied with the internal valuation arrived at by ICICI Bank, BoR’s promoter Tayals have asked their suitor to sweeten the deal to a level that would value the Udaipur-based bank at Rs 4,500 crore, reports PTI from Mumbai.
“ICICI 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,” BoR’s P K Tayal said. Earlier, ICICI released an internal valuation that put BoR’s worth at nealry Rs 3,040 crore.
