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Aion joins Fairfax, Everstone in vying for Catholic Syrian Bank stake

LiveMint logoLiveMint 30-05-2017 George Smith Alexander

Mumbai/Toronto: Aion Capital Partners Ltd, a private equity firm backed by Apollo Global Management LLC, is among suitors that have expressed interest in buying a stake in Catholic Syrian Bank Ltd, people familiar with the matter said.

Everstone Capital Advisors Pvt Ltd has also approached Catholic Syrian Bank’s board about a possible deal, according to the people, who asked not to be identified because the information is private. The investment firm would seek to merge its own finance company, IndoStar Capital Finance Ltd, with the Indian lender, the people said.

The suitors could present competition for Fairfax Financial Holdings Ltd., which already won central bank approval last year for a potential deal. Led by value investor Prem Watsa, Fairfax will enter detailed price negotiations with Catholic Syrian Bank as soon as this week about buying a 51% stake, the people said.

Ahead of talks, there is a significant gap between the valuations the parties have assigned to Catholic Syrian Bank, a lender headquartered in Thrissur, Kerala with more than 430 branches, according to the people. The bank will start discussions based on an external valuation report estimating it’s worth at about Rs165 to Rs200 rupees per share, plus a premium of at least 15%, one of the people said.

An investor recently bought about a 4% stake in Catholic Syrian Bank at around Rs160 per share, a premium to the lender’s book value of about Rs123 per share, the people said. That purchase valued the bank at about Rs12.96 billion, data compiled by Bloomberg show.

Any deal could mark the first time a financial investor takes control of an Indian lender. Catholic Syrian Bank had Rs162.2 billion of assets at the end of March, according to its financial results. The lender’s network includes 240 automated teller machines in India, its website shows. Representatives for Aion, Catholic Syrian Bank, Everstone and Fairfax declined to comment.

Aion and Everstone haven’t started formal negotiations with Catholic Syrian Bank, and any bidders would need to get central bank approval for a deal, according to the people. Catholic Syrian Bank may seriously engage with them if it can’t reach an agreement with Fairfax, the people said. Bloomberg

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