R System International
Special situation: Conditional Delisting
- CMP: 260/-
- Offer Price: 245/-
- Promoters hold 51.67%
- Public sharehlding is 48.33%
- Minimum number of shares for successful delisting: 90%
- Shares held by Bhavook Tripathi: 36.93%
- Given the background of Bhavook, he is unlikely to offer at this price and will ask for higher prices. But it will be wholly dependent on the Black stone (Acquirer) to accept or reject (influential side of the trade).
- Currently, the company trades at a premium and does not offer any margin of safety.
- What if bhavook offers at 245/- Maximum loss of 15/- ( Probablity 10%)
- What if bhavook offer at higher prices (say Rs. 350) and the company accepts that price? (0%)
- What if bhavook doesn’t offer at all and the blackstone back off (Probability 90%)
- Blackstone prima facie doesn’t seem to be desperate to buy and therefore there is little chance of acceptance at higher prices. There can be only one reason for R System acquisition i.e merger with mphasis limited for potential synergy gain.
Disclosure: Have a tracking position as I want to keep it as case study for future.
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