The holding company of
is willing to pay a control premium to buy Future Group’s 34% and another 17% stake in the insurer, three people familiar with the matter told ET.
Generali to Have a say in Matter
Generali owns 49% in the JV while IIT holds 17%. “There have been preliminary talks. Bandhan is keen but may not be willing to pay too high a premium. And while Future may be open to cash out, it would also depend on what Generali has to say…,” said a person familiar with the matter.
Bandhan founder Chandra Shekhar Ghosh and Future Group founder Kishore Biyani declined to comment.
CONTROLLING POWER
According to the agreement between the shareholders, Generali will have a say in any such transaction. The negotiations are revolving around who would have the controlling power, people in the know said. Bandhan has made it clear that it would go for the deal only if it gets a majority vote.
Generali also has the option to raise its stake with the Indian law now permitting an overseas partner to hold up to 74% in local insurance ventures. Generali did not comment on the matter.
“Bandhan is powerful in the financial services sector with its wide distribution network, while Generali without a strong local partner would not have distribution or scale. But Generali may not give it up easily given the opportunity available in India’s under penetrated insurance market,” said another person who is tracking the development from close quarters.
