Embassy Office Parks REIT is under market scrutiny following an announcement that an affiliate of Bain Capital intends to offload a substantial portion of its holdings. APAC Company XXIII Ltd, a Bain Capital affiliate, has offered to sell up to 5.64 percent of its stake in Embassy Office Parks REIT through a block trade.
Details of the Block Deal
The proposed transaction involves a base deal size of 4.19 crore units. Additionally, there is an option to increase the sale by another 1.15 crore units, which would add approximately ₹497 crore to the deal value. If this greenshoe option is fully exercised, the total stake divested by Bain Capital's affiliate would reach 5.64 percent of Embassy REIT.
Bloomberg News reports the estimated value of the entire deal, including the upsizing option, at around ₹2,300 crore. The floor price for the units has been set at ₹430 per unit, which represents a 5 percent discount compared to the REIT's closing price on the preceding Friday.
Market Implications and Agents
This significant block deal puts Embassy Office Parks REIT in focus as investors assess the implications of a major institutional shareholder reducing its stake. The sale is being managed by Morgan Stanley India and Kotak Securities, which are acting as the placement agents for the transaction.
According to the deal terms, the seller, APAC Company XXIII Ltd, will be subject to a 90-day lock-up period following the completion of the sale, restricting further divestment during this time. This move could potentially introduce more liquidity into the REIT's units and influence its short-term market performance.