BOR to merge with ICICI in no-cash deal: Kochhar

After the approval of the deal by the boards of the two banks, ICICI Bank Managing Director and CEO Chanda Kochhar said, "It is a win-win situation for shareholders. Just by dilution of three percent of our equity, we will get Bank of Rajasthan and it will expand our network by one fourth."

Announcing the deal, she said that the merger would be through offering 25 shares of ICICI for every 118 shares of BoR but its promoters Tayal Family which hitherto have over 50 per cent stake would not get a board seat in the amalgamated entity.

"Present ICICI Board would continue as it is," she said adding that the deal works out to about Rs 3,000 crore but "there is no cash outgo." It may be recalled that Bank of Rajasthan share prices nearly doubled in the last four trading sessions after the two lenders agreed in principle for the merger.

She said shareholders' approval for the deal would be obtained at the Extraordinary General Meeting on June 21.

"After this, we will move the Reserve Bank for its approval," she said adding that "as per our legal advise we do not need to go to the government for the approval of the Foreign Investment Promotion Board."

When contacted BoR's dominant share holder Pravin Tayal, who was asked by RBI to dilute family's over 55 per cent equity to about 10 per cent, said that "no decision" has been taken on his representation in ICICI after the merger.

Tayal, who had on Saturday sought one ICICI share for every three held by BoR Shareholders, said "I respect the amalgamation scheme decided by the Board."

The two sides had jointly appointed Haribhakti and Company for valuation, Kochhar said, adding that ICICI Bank had sought internal valuation through Deloitte, whose recommentation appeared to have the day.