Fairfax Offers to Buy 26% of Indian Brokerage IIFL for $255 Million

By and Rajhkumar K Shaaw | July 14, 2015

Fairfax India Holdings Corp., the $1 billion fund created by Toronto-based investor Prem Watsa, offered to buy 26 percent more in Indian brokerage IIFL Holdings Ltd.* for $255 million.

Fairfax India announced an offer to purchase about 83.1 million shares of IIFL Holdings at 195 rupees a piece from the open market for a total 16.21 billion rupees ($255 million), according to a stock exchange statement. Parent Fairfax Financial Holdings Ltd. already owns 14.21 percent in IIFL, including 5.24 percent through derivatives.

“It is not that they are going to participate in the management or have a control in the company,” Nirmal Jain, chairman of IIFL Group, said in an interview to Bloomberg TV India on Tuesday.

The purchase will be made through Fairfax’s unit FIH Mauritius Investments Ltd. IIFL Holdings surged 15 percent to 216.45 rupees as of 9:25 a.m. in Mumbai, poised for its biggest gain since February, 2012.

The open offer is expected to close later this year subject to regulatory approvals in India. Jain along with other owners hold 29.77 percent of IIFL Holdings, according to the latest stock exchange filings.

Fairfax India is seeking to make at least six investments in India and will target infrastructure, consumer services, retail and exporting industries, according to a filing.

The fund, which started trading in Toronto in January, is seeking to gain “significant influence” or control through its holdings, which can include bets on publicly listed companies, the filing said.

* A statement issued by Fairfax India said that IIFL operates businesses in non-banking finance, housing finance, wealth management, retail broking, institutional equities, investment banking and insurance distribution.

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