T Rowe to pay $135 m for 26% in UTI AMC
US-based investment firm T Rowe Price has signed an agreement with all the four shareholders of UTI Asset Management Company (UTI AMC) to sell a part of their stake in the mutual fund house.
By ET Bureau |
MUMBAI: US-based investment firm T Rowe Price has signed an agreement with all the four shareholders of UTI Asset Management Company (UTI AMC) to sell a part of their stake in the mutual fund house.
The NYSE-listed financial services firm would be paying $135 million for a 26% stake in the Mumbai-based fund house. The valuation works out to be 3.6% of assets managed by UTI AMC as on August 31, 2009. Interestingly, T Rowe Price���s participation comes at a time when the MF model is under fire, following the ban on entry loan towards investment. The sale transaction, which has been on the works for eight months, would now require regulatory approvals.
The UTI AMC���s four promoter institutions are State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank. The share sale process started in March this year and the shareholders zeroed in on T Rowe Price in July. As per the arrangement, each of the four institutions, which held a 25% stake in UTI AMC, is selling 6.5% to the foreign company. Following the deal, the UTI MF board will be reconstituted. Once the required approvals are in place, UTI AMC���s board will be reconstituted to include their new ally.
UTI MF reported a net profit of Rs 147 crore in FY 2009 - the highest in the industry in absolute terms.
The NYSE-listed financial services firm would be paying $135 million for a 26% stake in the Mumbai-based fund house. The valuation works out to be 3.6% of assets managed by UTI AMC as on August 31, 2009. Interestingly, T Rowe Price���s participation comes at a time when the MF model is under fire, following the ban on entry loan towards investment. The sale transaction, which has been on the works for eight months, would now require regulatory approvals.
The UTI AMC���s four promoter institutions are State Bank of India, Life Insurance Corporation of India, Bank of Baroda and Punjab National Bank. The share sale process started in March this year and the shareholders zeroed in on T Rowe Price in July. As per the arrangement, each of the four institutions, which held a 25% stake in UTI AMC, is selling 6.5% to the foreign company. Following the deal, the UTI MF board will be reconstituted. Once the required approvals are in place, UTI AMC���s board will be reconstituted to include their new ally.
UTI MF reported a net profit of Rs 147 crore in FY 2009 - the highest in the industry in absolute terms.
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