Allcargo Logistics said on Wednesday that it has received SEBI approval to hold an open offer to acquire approximately 3.17 crore shares or 26 per cent stake in Gati Ltd at ₹75 a share.
If the open offer is fully subscribed by the retail shareholders, it will take Allcargo’s stake in Gati to 46.83 per cent, helping it emerge as the controlling stake holder in Gati.
The open offer is expected to be launched between March and April 2020.
On December 5, Allcargo Logistics said it was acquiring a controlling stake in Gati for ₹416 crore, through a three-stage process.
The open offer will mark the completion of the acquisition process.
Allcargo has already deposited ₹238 crore — equivalent to 100 per cent of the capital required to fund the open offer — into an escrow account set up according to SEBI norms for the open offer transaction.
In January 2020, Allcargo completed a preferential allotment and part purchase of promoter shares in Gati, taking its stake in the express logistics company to 20.8 per cent. Following this, Allcargo has appointed two of its nominees on the board of Gati.
“The acquisition is in line with Allcargo Logistics' long-term strategy to strengthen its domestic business,” said Shashi Kiran Shetty, Chairman, Allcargo Logistics.
“The acquisition will further synergise our efforts to offer end-to-end services to our domestic and international customers. Apart from helping us consolidating our position as the true end-to-end logistics solutions provider, the acquisition will catapult us into the market-leading position in domestic express logistics segment. It will create a lot of value by leveraging the express logistics business of Gati with our current logistics courier and parcel logistics (CPL) business. We are confident that it will help Allcargo Logistics achieve sustainable growth as a leader in the logistics industry in the short, medium and long run,” he added.
Operating an asset-light and hub-and-spoke model, Gati currently has presence in 727 districts of India. It has simplified door-to-door express logistics by creating a formidable network serving over 19,000 pin codes across the country.
Single window solutions
With this acquisition, Allcargo will be able to offer single window solutions through a combination of ECU Worldwide — its global subsidiary — and Gati at a scale that otherwise does not exist in India at present.