Cheap, not clean

15 October 2019 By Una Galani Follow @ugalani

The French energy giant’s bid for part-control of Adani Gas is worth a measly 9% over the pre-deal price. That won’t entice public investors, allowing Total to buy a 37% stake from the namesake family. At least having a foreign partner may provide a governance uplift in value.

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India’s Adani Gas disclosed on Oct. 14 that French energy giant Total had reached an agreement to buy an up to a 37.4% stake in the company for as much as $866 million.

Total will make an open tender offer to public shareholders to buy up to 25.2% of the company, and then buy as many shares as needed from the Adani family to take its shareholding up to the targeted level.

Under the terms of the offer, the Adani family and Total would each hold 37.4% of the Mumbai-listed company and have the right to appoint two directors to the board.

Total, which is being advised by Citigroup, will offer 149.63 rupees per share as part of the open tender offer, or a premium of 8.7% to the closing price on Oct. 11.

Adani’s share price was trading at about 152 rupees at midday local time on Oct. 15.

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