Fairfax India said that its wholly-owned subsidiary, FIH Mauritius Investments together with certain of its affiliates have agreed to acquire 26% stake in IIFL Holdings for INR16.21bn ($255m).
FIH has made an open offer to buy up to approximately 83,128,852 equity shares of IIFL Holdings at a price of INR195 per share.
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Subject to receipt of regulatory approvals in India, the offer is scheduled to close later this year.
Fairfax India’s parent Fairfax Financial already holds about 8.97% of IIFL, and has an economic interest of another 5.24% through derivative instruments.
IIFL reported INR22.2bn in revenue and INR4.8bn in earnings for its fiscal year ended 31 March 2015. It operates businesses in non-banking finance, housing finance, wealth management, broking, investment banking and insurance distribution.
Fairfax chairman Prem Watsa said: "IIFL, under the independent leadership of its executive chairman, Nirmal Jain, has an impressive management team with a strong, long-term history of profitable growth, which fits within our strategy for investing in well-managed companies with high integrity and long-term track records in India."
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