Reliance to buy 67% of Just Dial for $767m
Indian tycoon’s company plans to to bolster its digital offerings
Reliance Industries Ltd will buy a controlling stake in local search engine and e-commerce marketplace, Just Dial Ltd, for Rs57.2 billion ($767 million) as Mukesh Ambani’s conglomerate looks to bolster its digital offerings.
India’s most valuable company plans to acquire 66.95 per cent stake in Just Dial through its arm, Reliance Retail Ventures Ltd. It will use a combination of preferential allotment, a secondary purchase from founder V.S.S. Mani and an open offer for up to 26 per cent. The first two will cost Rs35 billion and the open offer as much as Rs22.2 billion.
Just Dial’s board Friday approved the preferential issue of 21.2 million shares at Rs1,022.25 each to Reliance Retail for aggregate Rs21.6 billion in cash.
The purchase price represents a 4.7 per cent discount to the company’s last closing price of Rs1,072.70 per share, data compiled by Bloomberg show.
Digital future
Further, Reliance Retail will acquire 13.1 million shares from Mani at a price of Rs1,020 and will also make an open offer to investors at Rs1,022.25 a share, according to exchange filings.
“The investment in Just Dial underlines our commitment to new commerce by further boosting the digital ecosystem for millions of our partner merchants, micro, small and medium enterprises,” Isha Ambani, director at Reliance Retail, said.
Aggressive push
The latest transaction gives the retail-to-refining conglomerate a foothold in the gig economy and adds to its bouquet of digital offerings, which includes online retail, music, video streaming, gaming and financial services. Reliance, which raised more than $30 billion by selling stakes in its digital and retail units last year, has been aggressively acquiring local firms to take on rivals such as Amazon.com Inc. and Walmart-owned Flipkart in a bid to dominate India’s booming e-commerce sector.