Thread by @prudent_invstor

#indiabullsrealestate #NAM #Embassy The final verdict in the year-long "special situation" is a good read.

While the honorable #NCLT is pragmatic to squash the attempt of a marginal shareholder to derail a merger it has acted firmly on the true concerns

1/n

The court takes cognizance of the attempt of a marginal shareholder to acquire a minuscule stake in a public entity and an attempt to derail the broader interest of broader stakeholders in general. This would be a good reference for future cases as well.

2/n

The 67 page report is full of detailed citing, and one such citing possibly best summarizes the position of the judges in this case.

3/n

Based on the detailed analysis & independent review of the earlier valuation reports the Court has found material irregularities, non-adherence to ICAI guidelines, and lack of active verification of assets by the valuers and consideration of everything merely at face value

4/n

Further, the court has found the valuation report omitting key facts,
1) a 67% stake in a 100-acre JV valued at 581 Cr (67 acres) later dropping to a 74% stake in an 80-acre JV (59.2 acres)
2) Irregularities in NAM internal restructuring (which occurred post-deal)

5/n

Based on all of the above, the Chandigarh bench of NCLT didn't find it suitable to approve the amalgamation.

6/n

While the outcome is #IBReal minority shareholder friendly, however, the greater value would have been in the amalgamated entity.

#Embassy would certainly fight it out further at NCLAT, given all the precedence, unlikely the merger would be approved in its present form.

7/n

Given the long legal process ahead & further opportunity & capital loss for retail shareholders. salvaging the residual capital appears to be the most prudent

It is unlikely #Embassy will let this one slip out and the possibility of other suitors for #IBReal appears remote

8/8