Marriage of convenience: Indiabulls Housing Finance to acquire Lakshmi Vilas Bank
Taking ahead the growing trend of consolidation in the financial sector a step further, Chennai-based Lakshmi Vilas Bank (LVB) will merge with Gurugram-based Indiabulls Housing Finance Ltd , one of the fastest growing mortgage lender, in an all share-swap deal. In the proposed deal, the shareholders of LVB will get 14 shares of Indiabulls Housing Finance Ltd ( IBHFL ) for every 100 equity shares held in the bank. The deal implies a 36% premium to the closing price of LVB on April 5, 2019 and 63% premium to the bank’s last six months’ average price. The merged entity would have a net worth of Rs 19,472 crore and a loan book of Rs 1.23 lakh crore as of December 2008. Also, the entity’s capital adequacy ratio will be 20.6%. At present, IBHFL’s market capitalisation is 13 times that of LVB. The merger is expected to take 6 to 12 months as it would require regulatory approvals from RBI, National Housing Bank, CCI, SEBI and NCLT. The new entity wo...