What has triggered the open offer?
I can speak on behalf of the founders of Majesco Ltd, that after evaluating multiple options, the founders have decided to cede control to Aurum Ventures Group which is a well reputed organisation that has proven its capability in real estate development. Shareholders would be aware that a significant part of our asset is the real estate in Mahape and Aurum Ventures is a serious developer in that MMR region. So based on that decision, the founders have taken this open offer route that gives tremendous exit value to shareholders based on the value creation that can happen going forward.
The company has decided not to go ahead with the earlier decision to consider distribution of money through dividends. Overall we think that this should benefit shareholders and Aurum is the right fit for taking control of Majesco.
I understand, initially the plan was to monetise the real estate assets and then distribute the money. Why didn’t that happen?
The real estate scenario is not that positive and the property that Majesco wants is lying vacant and could not be monetised. We do not have expertise in real estate management. It was best to get the right player who can give the best value for the real estate that is there which is roughly around 160,000 sq ft. Aurum Ventures has acquired 14.78% of the company, which is the entire promoter stake, and followed it up with an open offer for 26% at Rs 77 per share which is significantly higher than the current market price. Overall from a shareholder perspective it is a good deal.
The other alternatives would have been going down a route which would have been either a capital reduction and subsequently monetising the real estate and then going through a dissolution process which would have been highly time consuming for the company. This is a much better and easy exit for shareholders who would like to exit at this point of time.
If there is low acceptance, will the acquirer be willing to hike the open offer price or do you think the Rs 77 per share is a fair value as it is at a premium to the current market price?
I cannot speak on behalf of the acquirer at all. What has been released today in terms of a press or notice to be exchanged by the acquirer is a mandatory open offer for 26% based on the acquisition of 14.78% controlling stake of the founders. I don’t know the other possible plans from the acquirer at this point of time.
What is the shareholding pattern looking like post the deal?
At this point of time, the promoter holds 14.78% and public shareholders have around 85%. Post this deal, Aurum will come in the shoes of the founders and depending upon the acceptance ratio and whatever share they get in the open offer, there will be be a change in the new promoter stake going forward.
