Reliance Retail to acquire majority stake in Just Dial for Rs 3,497 crore

Reliance Retail Ventures Limited (RRVL) on Friday announced the acquisition of a controlling stake in Just Dial Limited for Rs 3,497 crore.

Reliance Retail will hold a 40.95 per cent stake and would make an open offer to acquire up to 26 per cent in accordance with takeover regulations, the company said in a statement.

RRVL, Just Dial and VSS Mani & others on Friday executed definitive agreements which will entail preferential allotment of 2.12 crore equity shares (equivalent to 25.33 per cent post-preferential share capital) at a price of Rs 1,022.25 per share. Acquisition of 1.31 crore equity shares by RRVL from VSS Mani (equivalent to 15.62 per cent post-preferential share capital) at a price of Rs 1,020 per share, and shareholders agreement governing certain inter se rights and obligations between the parties.

RRVL would make a public announcement to the shareholders of Just Dial to acquire up to 2.17 crore equity shares of Just Dial representing 26 per cent.

Founder & CEO of Just Dial VSS Mani shall continue as its Managing Director and Chief Executive Officer and lead the company through the next phase of growth.

The capital infused by RRVL will help drive the growth and expansion of Just Dial into a comprehensive local listing and commerce platform. Just Dial would expand discovery on its platform and enhance transactions for millions of products and services. These investments will leverage Just Dial's existing database of 3 crore listings and its existing consumer traffic of 12.91 crore quarterly unique users, as on March 31, 2021, the statement said.

Isha Ambani, Director of RRVL, said “The investment in Just Dial underlines our commitment to New Commerce by further boosting the digital ecosystem for millions of our partner merchants, micro, small and medium enterprises. We look forward to working with the highly experienced management team of Just Dial as we further expand the business going forward.”

Morgan Stanley acted as a financial advisor, JM Financial as a manager to the open offer, Shardul Amarchand Mangaldas and Khaitan & Co as legal advisors, and Deloitte as accounting and tax advisors to RRVL.

Goldman Sachs acted as an exclusive financial advisor, Cyril Amarchand Mangaldas as legal advisor, and Ernst & Young provided tax advisory and diligence services to Just Dial and its promoters.

VSS Mani said, “Nearly 25 years ago, we had a vision to build a connected single platform dedicated to providing fast, free, reliable and comprehensive information to our users and connect buyers to sellers. Our strategic partnership with Reliance enables us to realise this vision and transform the business going forward.”

The transaction is subject to shareholder and other customary closing conditions and approvals.