Shares of Allcargo Logistics rose as much as 4 percent on Friday to Rs 97.80 on acquiring a controlling stake in Gati Ltd. Shares of Gati Ltd, on the other hand, fell 5.5 percent to Rs 62.40 apiece.
On Thursday, in a stock exchange filing, Allcargo announced its entry into the express logistics space on signing a share purchase agreement with Gati's promoter group to acquire up to 10.3 million shares at Rs 75 apiece.
The Mumbai-based logistics firm will also subscribe to a preferential issue of 13.3 million equity shares of Gati at Rs 75 apiece.
On successful closure of the two agreements, Allcargo will own a 19.43 percent stake in Gati and spend Rs 178 crore for acquiring the stake.
Allcargo will be classified as a promoter of Gati, along with the existing promoters, with a right to nominate directors on the board.
It will also acquire another 26 percent stake from Gati's public shareholders through an open offer at the of Rs 75 per share.
If and when the acquisition of the entire 26 percent will be complete, Allcargo will end up spending another Rs 238 crore, taking its total acquisition cost to Rs 416 crore. The deal is expected to close by 30 March 2020.