Indiabulls Real Estate valued 26 per cent premium for merger with Embassy Group

Indiabulls Real Estate (IBREL) on Tuesday informed the bourses that it has signed definitive merger documentation with Embassy Group. The merged entity will be called Embassy Developments Ltd and would be co-headquartered in Mumbai and Bengaluru.

The company in its exchange filing said that the merged entity will have a balanced mix of commercial and residential assets, which should provide a natural hedge against cyclicality. The combined entity will have 30 projects spread across major tier-I and a few tier-II cities of India. It will also have 80.8 million square feet of the launched and planned development area.

For this merger, the swap ratio is 10 shares of Indiabulls Real Estate to every 6.619 shares of NAM. With this swap ratio, Indiabulls is valued at Rs 92.5 per share, which is nearly 26 per cent premium to Tuesday’s closing price.

Post-merger, Embassy Group will be the new promoter, which will hold nearly 44.9 per cent while the existing IBREL Promoter Group will hold 9.8 per cent. Blackstone Group, as well as the existing public & institutional shareholders, will hold 19.1 per cent and 26.2 per cent, respectively.

Further, the company said that near completion inventory is set to generate a net surplus of Rs 6,288 crore.