CVC likely to trump EQT and acquire Avaas Financiers for the largest M&A of a housing finance company
Buyout group CVC Capital Partners, one of the largest European private equity groups, has trumped EQT to emerge as the highest bidder for to acquire affordable housing finance company Aavas Financiers Ltd (formerly known as AU Housing Finance Ltd) as its current promoters, private equity firms Kedaara Capital and Partners Group are looking to exit their 8 year old joint investment, said people in the know.
A formal announcement is expected this weekday, latest by Monday.
CVC and EQT were the two final contenders as the third Bain Capital decided to go slow.
ET in its July 28 edition was the 1st to report that EQT, CVC and Bain were the last 3 contenders for the company that went in earlier August as private equity investors look to consolidate their position in the fast growing sector.
Between Kedaara and Partners, the duo currently owns 26.47% in the company with the former owning slightly more than the latter. Their exit will trigger an open offer for the acquisition of an additional 26 per cent from public shareholders and result in a change in control.
The current market value for the company is Rs 13,019.67 crore. If the open offer is fully subscribed to CVC is set to own a controlling 52.47% stake paying a potential Rs 6831 crore for the buyout – the largest in the space till date, much larger than the Warburg Pincus acquisition of Shriram Finance this May.
However, the company’s stock has run up 19% in the last 6 months in anticipation of a sale. It is not clear if CVC is paying a premium to the current
