Max Financial Services share price added more than 3 percent intraday on March 5 after the board of the company approved share swap deal with Mitsui Sumitomo.
The board of Max Financial Services (MFSL) has approved a transaction which will allow Mitsui Sumitomo Insurance (MSI) to swap 20.57 percent of its shareholding in Max Life insurance with 21.87 percent stake in MFSL.
This will enable the company to simplify the shareholding structure in its subsidiary and have more flexibility to attract strategic investments in Max Life in the future and yet maintain its significant majority ownership.
The transaction will also provide MFSL the option to purchase from MSI its balance shareholding in Max Life for cash at a price of Rs 85 per share.
MSI subscribing 75,458,088 shares of at a price of Rs 565.11 per share on the date of allotment of the aforesaid fresh shares. In consideration, MFS will receive 394,775,831 shares from MSI at a price of Rs 108.02 per share translating into 20.57 percent stake of MLIC.
The equity stake held by MFS in Max Life will increase to 93.10 percent.
At 13:49 hrs, Max Financial Services was quoting at Rs 601.65, up Rs 10, or 1.69 percent on the BSE.
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