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Has Crompton Greaves Consumer paid fair value for Butterfly Gandhimathi?

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Has Crompton Greaves Consumer paid fair value for Butterfly Gandhimathi?

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Stocks of Crompton Greaves Consumer Electricals Ltd and Butterfly Gandhimathi gained after Crompton agrees to buy out the promoters of the kitchenware player and make an open offer to the public. CNBC-TV18 had reported the deal was on the cards.

Last week, CNBC-TV18 had reported that Crompton Greaves Consumer Electricals Ltd had shown interest in Butterfly Gandhimathi. The deal was announced last night where the company will now be buying a controlling stake in Butterfly Gandhimathi.

The entire deal size is about Rs 2,077 crore. This entails about 55 percent stake that Crompton Greaves Consumer Electricals is going to be buying from the promoters, which amounts to about Rs 1,379 crore, which is at about Rs 1,400 per equity share.
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This deal will also trigger an open offer for an additional 20 percent stake that is at about Rs 1,433 per equity share, which is about Rs 666 crore. The total comes up to about Rs 2,077 crore and this will be funded through internal accruals and debt.
In terms of valuation, the question is has Crompton Greaves Consumer Electricals paid fair value or more for Butterfly Gandhimathi?
Watch the accompanying video of CNBC-TV18’s Shilpa Ranipeta and Mangalam Maloo for more details.
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