SML Isuzu shares fall 10% after M&M announces acquisition, open offer at discount to CMP

Shares of SML Isuzu Ltd., fell as much as 10% on Monday, April 28, on the news of passenger and commercial vehicle manufacturer Mahindra & Mahindra's decision to acquire the company, which was reported over the weekend.

M&M said in an exchange filing over the weekend, that it will be acquiring a 58.96% stake in SML Isuzu for a sum of ₹555 crore. The company will also be making an open offer to acquire 26% stake from eligible public shareholders of SML Isuzu.

While M&M will be acquiring the stake from promoters and Isuzu Motors at a price of ₹660 per share, the Open Offer price has been fixed as ₹1,554, which is a 13% discount to SML Isuzu's closing price last Friday.

JBM Auto has also been in the race to acquire SML Isuzu, as reported by CNBC-TV18, back in 2023, citing sources.

The stock of JBM Auto had seen a sharp surge on March 24, after CNBC Awaaz had reported that M&M is in talks to acquire the entire promoter stake of SML Isuzu. Shares had surged as much as 18% that afternoon as another entity had emerged as the front-runner to acquire SML Isuzu, which allayed fears of a heavy cash outgo from the company.

Ashok Leyland though, had outright denied reports of the company being in the fray to acquire SML Isuzu.

"Ashok Leyland would like to outrightly deny this news as factually incorrect," the company had said in an exchange filing back on March 26.

Shares of JBM Auto and Ashok Leyland are also trading with losses. The shares of SML Isuzu are currently in a 10% lower circuit.