Citigroup to buy back e-Service at Rs 800 per share
13 Apr 2004
Mumbai: Citigroup has announced that it will buy back the shares e-Service International Ltd at Rs 800 per share.
This is 27 per cent higher than the shares'' closing price on April 8. The stock rose to Rs 800 on the BSE yesterday and closed at Rs 777.75; about 24 per cent up from its previous close of Rs 630 a share.
The acquisition of the outstanding e-Serve shares would be made by Citibank Overseas Investment Corporation, a wholly-owned subsidiary of Citigroup, through a shareholder-led reverse book-building process as per the new SEBI de-listing guidelines, a company release said.
Citigroup said that it might not go ahead with the offer if the final price as determined by SEBI''s delisting guidelines works out to more than Rs 800. At that price, the group estimates the purchase would cost about Rs 550 crore. A Citigroup spokesperson said the deal would help the company increase operational flexibility because it is e-Serve''s largest shareholder as well as sole customer.
"We believe it is a fair price having determined this in consultation with financial advisors and merchant banker," the Citigroup spokesperson said.