IIFL Finance dismisses reports on Fairfax planning company exit to fund IDBI Bank deal

IIFL Finance clarified on Wednesday that no negotiations have taken place regarding reports that Fairfax is planning to exit the company to fund its proposed IDBI Bank deal.

Media reports had suggested that Fairfax was weighing the sale of its entire stake in IIFL Finance to comply with regulatory guidelines as it moves closer to acquiring IDBI Bank Ltd.

Blackstone is in talks with Fairfax, founded by Indian-born Canadian billionaire Prem Watsa and other shareholders to acquire the stake in IIFL Finance as the private equity firm’s potential involvement comes at a time when India’s financial services industry has become a target for acquisitions.


Also read: Fairfax to exit IIFL Finance before likely IDBI Bank deal; Blackstone emerges as suitor

"With reference to the said news article, there is no such information/ event that has not already been disclosed to the Stock Exchanges which could account for said movement in the trading," the company said.

According to reports, Fairfax has informed the government on its plans to merge CSB Bank with IDBI Bank once it succeeds in its bid to takeover the state-owned lender, billed as the biggest overseas M&A in Indian banking.

Last year, the US alternative investment manager invested more than $700 million for a 9.9% stake in Federal Bank.

Fairfax held 15.18% in IIFL Finance at the end of June but then sold a 1.49% stake to Capital Group entities for Rs 374 crore in July, reducing its holding to about 13.69%.

Fairfax plans to simplify its lending interests after acquiring IDBI Bank and avoid overlaps between the businesses through the proposed exit. Fairfax has emerged as the frontrunner to acquire a combined 60.7% IDBI Bank stake from the Centre and Life Insurance Corp. The reports stated that Watsa could pay Rs 81 per share for the lender, taking the total deal to roughly Rs 53,000 crore, or $5.5 billion.