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Indiabulls to buy Dev Property for Rs 1,092 cr

Indiabulls Real Estate (IBREL), India’s fourth biggest developer by market value, will acquire its partner Dev Property Development (DPD) in an all-stock deal.
Indiabulls has valued Dev Property at £138 million (about Rs 1,091.85 crore) and the share at 100 pence, based on the closing price of IBREL at Rs 654.40 on Wednesday (at an exchange rate of Rs 79.12 for every Pound Sterling).
IBREL will issue new shares in the form of global depository receipts (to be listed on the Luxembourg Stock Exchange’s Euro MTF) equivalent to the valuation of DPD.
Indiabulls is offering 0.12091 of a global depository receipt for each share of London-listed Dev Property, the Mumbai-based real estate company said.
The offer matches the £138 million Dev Property raised when it sold shares in January 2007 in the Alternate Investment Market of the London Stock Exchange. The stock has since fallen 24.5 per cent.
The proposal to buy DPD was approved by the IBREL board at a meeting today. The deal is subject to The approval of shareholders and certain regulatory approvals.
Meanwhile, Indiabulls Real Estate also said it plans to raise upto £150 million through an international offering for its business purposes. DPD is expected to become a fully-owned subsidiary of IBREL after the acquisition.
Indiabulls Real Estate, spun off from Indiabulls Financial Services in February last year, lost 1.02 per cent (or Rs 6.70), to close at Rs 647.30 on the Bombay Stock Exchange on Thursday.
DPD, which is registered in the Isle of Man, has investments in two Indiabulls projects at Jupiter Mills and Elphinstone Mills in Mumbai and a special economic zone in Raigarh, Maharashtra.
DPD will sell its holdings in the two Mumbai projects to Indiabulls Properties Investment Trust. Indiabulls Properties Investment Trust has planned an initial public issue on the Singapore Stock Exchange.
DPD is also engaged in IT and ITeS projects, as well as residential real estate development, and has planned investments in special economic zones.
Realty firms including DLF, India’s biggest, are expanding to meet growing demand for shops, offices and houses in an economy that is forecast to grow 8.7 per cent this year.

Source: Business Standard

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