Stonepeak, CPPIB to launch open offer for Castrol India at premium after BP deal

New Delhi, Dec 26 (PTI) Canada Pension Plan Investment Board and US private equity firm Stonepeak will launch an open offer to buy up to 26 per cent stake in Castrol's Indian unit at a premium to the current trading price, according to a regulatory filing.

The open offer for 25.71 crore shares is being made following their deal to acquire the firm from parent BP.

Stonepeak and CPPIB will offer Castrol India shareholders Rs 194.04 per share, representing a 2.5 per cent premium to Wednesday's closing price. Castrol India shares were trading at Rs 191.40 on the BSE on Friday.

"The Acquirer and the persons acting in concerts (PACs) hereby make this Open Offer to the public shareholders to acquire up to 25,71,71,820 (25.71 crore) equity shares, constituting 26 per cent of the equity share capital, at a price of Rs 194.04 per share aggregating to a total consideration of up to Rs 4,990 crore," according to regulatory filing by Castrol India.

Britain's BP earlier this week struck a deal to sell a 65 per cent stake in its Castrol lubricants business to US investment firm Stonepeak for roughly USD 6 billion, in a transaction that values the iconic unit at about USD 10.1 billion including debt. CPPIB is also investing up to USD 1.05 billion for an indirect stake. Castrol Ltd holds 51 per cent of the equity share capital of Castrol India.

Under SEBI's takeover regulations, acquisition of 25 per cent or more in a listed company triggers a mandatory open offer to purchase at least an additional 26 per cent from public shareholders.

If the open offer goes through, the new owners will own 77 per cent of Castrol India.

The divestment by BP is part of a targeted USD 20 billion asset sale programme through 2027, aimed at bolstering financial resilience amid underperformance in some segments and activist investor pressure.

"Transaction accelerates delivery of BP's reset strategy, will significantly strengthen its balance sheet, and advances strategy to focus on the downstream," the company had said on December 24.

BP retained a 35 per cent stake in Castrol, providing exposure to the lubricant maker's growth plan while retaining optionality to realise further value in the future.PTI ANZ MR