On May 18, 2010, share prices of the Bank of Rajasthan (BoR) observed a 20% hike after rumor spread out that ICICI Bank, the largest private sector bank, would buy stakes in BoR.
On the BSE, shares of BoR went up 19.95% seeing a 52-week high at Rs.99.50 against the last closing share price.
On the NSE, share prices advanced 20% settling at Rs.99.45.
On the BSE and NSE a total of 27.80 million shares of BoR changed hands today.
Earlier this month, news came out that ICICI Bank will buy from Tayal Group, who holds 29% stake in the bank. News reports also said that ICICI Bank was ready to ready to pay more than the current market value.
After the market was closed, BoR announced that it would merge with ICICI Bank and officials of the two banks have reached an “agreement for amalgamation.” The entire deal is worth Rs.15 billion as per the closing share prices of May 18, 2010.
Also the board of directors of BoR met on May 18, 2010 and approved a proposal from dominant share holders to sell its stake to ICICI Bank and start due diligence of the transaction which will be conducted by Haribhakti & Co.
G Padmanabhan, MD & CEO, BoR, said, “The Board has given its in-principle approval for the amalgamation of Bank of Rajasthan with ICICI Bank.”
The Tayals, the major promoter of the bank, recently came under pressure from Securities and Exchange Board of India and RBI. The board of directors will meet next Tuesday to finalize the share-swap ratio and discuss about the due diligence report.