M&A

M&A

Tata Sons to acquire controlling stake in Tejas Networks

Press Release  

Panatone Finvest Ltd, a subsidiary of Tata Sons Pvt Ltd, is to acquire a controlling stake in Bengaluru-based, publicly listed telecom equipment firm Tejas Networks. Under the deal, the acquirer will make an initial investment of over INR 1,800 crore initially - via a mix of preferential allotment and acquisition of shares from existing shareholders. Subsequently, Panatone and other Tata entities will make an open offer to acquire up to 4.03 crore equity shares of Tejas Networks (representing an additional 26% stake). Kotak Mahindra Capital Company is the manager to the open offer and Khaitan & Co is the legal advisor to the deal. Tejas Networks MD and CEO Sanjay Naik will continue post transaction. Under the deal, Tejas will make a preferential allotment of 1.94 crore equity shares at INR 258 apiece, aggregating to INR 500 crore, to Panatone. There will also be another preferential allotment of 3.68 crore warrants, each carrying a right to subscribe to one equity share at an exercise price of INR 258 each, aggregating to INR 950 crore. Additionally, a preferential allotment of 1.55 crore warrants, each carrying a right to subscribe to one equity share at an exercise price of INR 258 each, aggregating to INR 400 crore, will also be made. Panatone will also acquire up to 13 lakh equity shares of Tejas from certain management team members, at a price not exceeding INR 258 each, aggregating to INR 34 crore.

From the Venture Intelligence PE-VC Deal Database: Between Feb-02 and Jan-07, Tejas Networks had raised funds from Mayfield, Sandstone Capital, Battery Ventures, Gabriel Ventures, Intel Capital, IIML and others; some investors have made partial or full exits. (Subscribers to the database can login to view the valuation, deal structuring and other transaction details.)