McGraw Hill initiates open offer for additional 22.23% stake in Crisil
03 Jun 2013
McGraw Hill Financial has announced its plan for a voluntary open offer to acquire up to 15,670,372 shares, representing 22.23 per cent of the total equity shares outstanding in Crisil Ltd, a global analytical company and India's leader in credit ratings and research.
''The offer to increase our investment in Crisil represents a vote of confidence in Crisil, its board of directors, leadership team and talented employees, as well as the products and services Crisil brings to market. The offer also represents a vote of confidence in the growth prospects of India and the other markets that Crisil serves,'' said Harold McGraw III, chairman, president and CEO of McGraw Hill Financial.
Full acceptance of the offer would increase McGraw Hill Financial's total stake in Crisil to 75 per cent from 52.77 per cent. The transaction, values at approximately $340 million at current exchange rate, will be funded through McGraw Hill Financial's existing cash resources.
The cash offer of Rs.1210 or $21.42 per share represents a premium of 29 per cent to the closing share price on May 31, 2013, and a premium of 12 per cent to Crisil's all-time closing high on the National Stock Exchange of India Limited (NSE).
The offer also provides an attractive liquidity opportunity to Crisil shareholders. Crisil's stock had an average daily trading volume of 32,551 shares cumulatively on the NSE and Bombay Stock Exchange (BSE) during the past 12 months.
''We intend to keep Crisil a listed public, independent company to maintain the company's leadership and essential role across the Indian economy, and to preserve the entrepreneurial, growth-oriented spirit of the high-performing Crisil team,'' McGraw added.
McGraw Hill Financial had good relationship with Crisil since 1996, said Douglas Peterson, president of Standard & Poor's Ratings Services, a business unit of McGraw Hill Financial, adding that the company is looking forward to continue its collaboration with Crisil and support its growth in India and internationally.
The tender offer period is expected to begin in July 2013 and conclude in early August 2013. All requirements and procedures under Indian law will be strictly followed.
Crisil and S&P Ratings Services first signed an affiliation agreement in 1996. The relationship was further strengthened in 1997 when McGraw Hill Financial acquired its initial equity stake in Crisil. In 2005, McGraw Hill Financial became Crisil's majority shareholder (See: S&P takes over CRISIL).
Over the past five years, Crisil's revenue has increased at a compound annual growth rate of 19.3 per cent. In 2012, Crisil had total sales of Rs977.7 crore, 63 per cent of which was generated outside of India, and net income of Rs220.4 crore.
McGraw Hill Financial is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Its brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week.
