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Fairfax Eyes IDBI Bank Stake in $7 Billion Deal
12 Dec
Summary
- Fairfax Financial is leading the race to acquire a controlling stake in IDBI Bank.
- Government and LIC are selling a 60.72% stake worth nearly $7 billion.
- Fairfax may offer an all-cash bid, while Kotak Mahindra considers cash and shares.
Toronto-based Fairfax Financial is emerging as the frontrunner in the bid to acquire a significant stake in IDBI Bank. The financial bids for the controlling stake are due by the end of December, with Fairfax competing against Kotak Mahindra Bank. This privatization move by the Indian government and LIC involves selling their combined 60.72% ownership, which holds a market value close to $7 billion.
Fairfax, led by billionaire Prem Watsa, is reportedly considering an all-cash offer, aligning with the bank's current market value. This strategy could position them favorably against Kotak Mahindra Bank, which is exploring a bid comprising both cash and shares. Both institutions have been cleared by the Reserve Bank of India.
The sale process, which began with expressions of interest two years ago, is nearing its financial bidding stage. Emirates NBD, initially interested, is reassessing its participation due to a recent acquisition. The government will set a confidential reserve price after bid submissions but before opening them, following established procedures.
