InvestorQ : What exactly was the problem in the PNB Housing deal with Carlyle?
sarah Leo made post

What exactly was the problem in the PNB Housing deal with Carlyle?

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Rashi Mehra answered.
3 weeks ago
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The deal did look like a good deal because Carlyle will get a valuable investment, PNB Housing will get capital and the price has gone up sharply. More than anything else, Aditya Puri was to come on board to drive the business at PNB Housing. However, the deal got stuck after proxy firms objected to it. SEBI asked PNB Housing to put the deal on hold, for which PNB Housing has approached SEBI. The SAT Ruling is on 12 July.

There are reasons why SEBI had second thoughts on the deal. The first reason was why did PNB Housing not do a rights issue, which would have been fair to all shareholders. Secondly, there was the risk of quoting too low a price for a state asset, which normally happens. Thirdly, the price of Rs.390 offered was lower than the book value of Rs.530 of PNB Housing. Lastly, Carlyle was not paying a control premium, although there would get 50% stake.

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