Total offers 'attractive' Rs 149.63 per share to Adani Gas shareholders

French oil major Total has made a cash offer of Rs 149.63 per share to Adani Gas’ public shareholders, according to a draft letter of offer shared with exchanges on Tuesday. The offer has been made in line with Total’s definitive agreement to acquire 37.4 per cent share in the company.

As the company continues to trade at a price higher that its peers in the same business, analysts call the offer an attractive one.

“Adani Gas stock is expensive when compared with peers. This makes Total’s offer an attractive one for those who wish to exit. For those who wish to continue holding the stock it is a word of caution that the stock is already expensive,” said an analyst who did not wish to be named.

Part of the cash offer, Total looks to acquire up to 277.1 million fully paid equity shares of the face value of Re 1 from Adani Gas’ public shareholders.

On October 15, Total signed a definitive agreement to acquire a 37.4 per cent stake in Adani Gas for about Rs 5,700 crore. As part of the agreement, Total will purchase shares in Adani Gas through a tender offer to public shareholders to acquire up to 25.2 per cent shares and purchase the residual shares from the Adani promoter family.

“The deal is overpriced from the buyer’s point of view. Adani Gas’ peers have a higher margin business mix compared with that of Adani Gas. Given that, the company is trading higher to its peers, the cash offer is a good one for retail investors,” said a second oil and gas analyst who did not wish to be named. The analyst added: “There is not much for institutional investors in this stock, as there is not enough free-float available for a true price discovery.”

Adani Gas closed at Rs 147.9 per share today, 2 per cent lower from its close on October 15, when the deal was announced. Meanwhile, share price for Indrapastha Gas and Mahangar Gas gained 4 per cent in the same period to close at Rs 381.6 and Rs 985.8 per share, respectively. “The Adani Gas deal announcement has given a sentimental push to the other stocks operating in the same segment,” said the second analyst quoted earlier.

Adani Gas has city gas distribution networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana, and Khurja in Uttar Pradesh. In addition, a consortium of Adani Gas and Indian Oil is developing gas distribution networks in Allahabad, Chandigarh, Ernakulam, Panipat, Daman, Dharwad and Udhamsingh Nagar.

Adani Gas zooms 18% as French firm Total agrees to buy 37.4% stake

Shares of Adani Gas zoomed 18 per cent to Rs 162 on the BSE in early morning trade on Monday after the company said French energy giant Total SA would acquire 37.4 per cent stake in it. The stock was trading close to its 52-week high of Rs 184 touched on June 4, 2019.

“Total will purchase 37.4 per cent shares in Adani Gas through a tender offer to public shareholders to acquire up to 25.2 per cent shares subject to applicable regulations and purchase the residual shares from Adani Family,” Adani Gas said in a regulatory filing. READ FILING HERE

Adani Family and TOTAL SA shareholders shall ultimately hold 37.4 per cent each and public shareholders shall hold remaining 25.2 per cent.

Adani and TOTAL, the company said, have signed definitive agreements to deepen their existing partnership and commitment for developing multi-energy offerings to the Indian energy market. The acquisition is the "largest foreign direct investment in India’s city gas distribution (CGD) sector".

"CGD is a natural extension of the plans of both partners to invest in infrastructure and assets worth over $1 billion, which span Liquefied Natural Gas (LNG) infrastructure and marketing and fuel retail business, announced in October 2018," the company said.

The partnership and equity support from the partners will help Adani Gas accelerate project executions in all its new geographical areas. Adani Gas shall also pursue fuel retail business in India and target to setup 1,500 fuel stations offering top of the line products in the coming years, it added.

At 09:24 am, Adani Gas was trading 13 per cent higher at Rs 155 on the BSE, as compared to a 0.16 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 20 million equity shares changing hands in first 10 minutes on the NSE and BSE.

Total SA to buy 37.4% stake in Adani Gas for nearly Rs 5,700 crore

French oil major Total SA has signed definitive agreement to buy 37.4 per cent stake in Gautam Adani-led Adani Gas for about Rs 5,700 crore.

Total will purchase the shares in Adani Gas through a tender offer to public shareholders to acquire up to 25.2 per cent shares, subject to applicable regulations and purchase the residual shares from Adani Family.

"Adani Family and Total SA shareholders shall ultimately hold 37.4 per cent each and public shareholders shall hold remaining 25.2 per cent, " Adani Gas said in a statement on Monday. The deal will be the largest foreign direct investment in India's city gas distribution (CGD), making it one of the largest downstream energy partnership too.

The company said that CGD is a natural extension of the plans of both partners to invest in infrastructure and assets worth over $1 billion, which span Liquefied Natural Gas (LNG) infrastructure and marketing and fuel retail business, announced in October 2018.

Adani Gas is also planning to set up 1,500 fuel stations offering top of the line products in the coming years. The expanded partnership will develop regasification terminals including Dhamra LNG, on the East coast of India; market LNG to the Indian markets and through Adani Gas, target to distribute gas to 7.5 per cent of India’s population.

"Both partners would make significant investments in the next 10 years across the businesses to develop India’s gas infrastructure, distribution, marketing businesses with a presence in over 15 states," it said. These geographical areas will cover 71 districts too.

Adani Gas and its joint venture will distribute gas to 6 million households in the next decade. Adani Gas CNG network will be developed exploring synergies including co-location of fuel retail and CNG outlets, the statement added.

Speaking on the occasion, Adani Group Chairman, Gautam Adani, said, “The partnership will derive significant synergies between Adani’s capabilities of developing world-class assets and Total’s global best practices as well as leveraging business synergies across LNG, Fuel Retail and City Gas distribution. We look forward to working together towards delivering India’s vision for clean and green energy."

France's Total close to buying 30% in Adani Gas for Rs 5,500 crore: Report

French energy giant Total SA is close to acquiring a 30% stake in Indian gas distribution company Adani Gas for upwards of rupees 5,500 crore ($800 million), the Times of India reported on Friday.

The deal is expected to trigger an open offer to public shareholders of Adani Gas, and Total may end up having a roughly equal stake in the company as billionaire promoter Gautam Adani, the report said.

Adani Gas, an arm of Adani Group, operates a distribution pipeline network of over 6,000 km and caters to nearly 350,000 retail customers, the report said.

Total and Adani Gas were not immediately available for comment.