HDFC Bank approves merger share swap ratio of 1: 29 Centurion Bank of Punjab shares

25 February 2008

Mumbai: At its meeting held in Mumbai this morning, the Board of HDFC Bank has approved a share swap ratio for acquiring the country's fourth largest private bank, Centurion Bank of Punjab, at one equity share of Rs10 of HDFC Bank for every 29 equity shares of Centurion Bank of Punjab of a face value of Re1.

On Saturday, 23 February, the board of directors of Centurion Bank of Punjab and HDFC Bank, met separately and accorded an in-principle approval to pursue merger talks (See: Centurion Bank of Punjab and HDFC Bank directors approve merger talks)

The merger ratio, subject to due diligence to be conducted, was worked out by the joint valuation report submitted by accounting firm Ernst & Young Pvt Ltd and Dalal & Shah, chartered accountants.

The board noted that in the event of the merger, it would consider to its promoter, Housing Development Finance Corporation Ltd, to enable HDFC to maintain its shareholding percentage in the bank.

HDFC Ltd, HDFC Investments and HDFC Holdings jointly own 23.28 per cent in HDFC Bank and FII's own 26.57 per cent.  Domestic mutual funds and insurance firms jointly own another 6.20 per cent, while the central and state governments own 1.08 per cent

The bank's board will meet on 28 February to consider the draft scheme of amalgamation and due diligence report.