InvestorQ : What role do you see for PNB in this PNB Housing case and what is the best way out?
Sam Eswaran made post

What role do you see for PNB in this PNB Housing case and what is the best way out?

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Moii Chavate answered.
6 months ago
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There are some key players in this game. A lot will depend on how PNB voted in the EGM, though it is reported that they voted against the deal. If PNB objects to the deal then with its 32% stake in PNB Housing, it can block the deal. But that comes back to the basic questions, does PNB have the ability to infuse fresh funds? At this juncture it surely looks unlikely. Hence Carlyle does look like a practical solution to the problem.

What is a better way out to keep all stakeholders happy? One way would be to sweeten the deal. The price of Rs.390 per share does look unfair when you consider that PNB Housing has a book value of Rs.525 per share. There is the issue of control premium not being part of the price. Also, PSUs are at depressed valuations and the way the stock price doubled shows there was the potential for a higher price. A sweetened deal may be the best answer.

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