In an interesting development the Board of Directors of Global Trust Bank (GTB) has called off its merger plans with UTI Bank.
GTB and UTI Bank had come together with a merger proposal in January 2001 with a view to create the largest private sector bank in India. Since submitting the merger application, many issues cropped up in the media. There were accusations of price rigging of the GTB share price by the Managing Director Mr. Ramesh Gelli in consort with Mumbai broker Mr. Ketan Parekh. Following this, UTI Bank asked for a relook at the swap ratio.
The recommendation of SBI CAPS and subsequently Deloltte Haskin Sells (DHS), who evaluated the swap ratio on multiple factors, still reached the same conclusion of 9 shares of UTI Bank for 4 shares of GTB.
The DHS report clearly indicated that share price considered for the computation, ignoring the periods of high price of GTB, would still not alter the final swap ratio. Citing this, the GTB management indicated that it would be very uncomfortable for them to enter into a merger process with a finger pointed out for price rigging.
These and various other reports appearing in the media adversely affected the goodwill and understanding that was established between the two banks, making the environment not conducive for a merger at this point in time. It seems that the GTB management decided to call off the merger on their own as a face saving measure (before UTI Bank could do so).
Axis Bank declared the results for the third quarter of the financial year ended March 2017 (3QFY17). The bank has reported 4.1% YoY growth in net interest income while net profits declined 73.4% YoY in 3QFY17.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407