In a significant development, two leading proxy advisory firms, InGovern and SES, have endorsed the scheme of arrangement proposed by ICICI Securities for the delisting of its equity shares, favoring the issuance of ICICI Bank equity shares to ICICI Securities shareholders.
The proposed delisting would entail ICICI Securities becoming a wholly-owned subsidiary of ICICI Bank, a move that has garnered support from both advisory firms. Shareholders of ICICI Bank and ICICI Securities are scheduled to convene separately on March 27, 2024, to deliberate and vote on the proposed scheme.
Under the scheme, public shareholders of ICICI Securities will receive 67 equity shares of ICICI Bank for every 100 equity shares held in ICICI Securities. The arrangement, which has received approvals from the boards of directors of both entities and stock exchanges, aims to foster closer integration between the two companies.
According to InGovern, the proposed swap ratio of 0.67 represents a premium of 24.07% based on the average ratio of VWAP (Volume-Weighted Average Price) of ICICI Securities stock price to ICICI Bank stock price over the preceding six months. Similarly, SES noted that the proposed exchange ratio offers a slight premium to ICICI Securities shareholders based on the undisturbed share price data of both companies for the preceding year.
Both advisory firms emphasized the potential benefits of the delisting and subsequent integration. InGovern highlighted the enhanced liquidity and better price discovery for ICICI Securities shareholders, while SES underscored the operational efficiencies and synergies expected from the combined entity.
The merger is poised to capitalize on synergies between ICICI Bank and ICICI Securities, streamlining processes and bolstering operational effectiveness. With ICICI Securities set to function as a wholly-owned subsidiary, the combined entity aims to leverage the strengths of both entities to drive growth and profitability.
Investors are advised to consider these factors and seek advice from certified experts before making any investment decisions.
