LONDON, UK / ACCESSWIRE / September 21, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Tata Motors Ltd (NYSE: TTM) ("TTM"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=TTM. According to media reports, Tata Sons Ltd, the majority shareholder in Tata Motors, has acquired an additional 1.7% stake in TTM via reverse book building mechanism. The transaction is valued approximately at Rs.2000 crores ($312 million). Tata Sons had increased stake in three Tata Group Companies - Tata Motors Ltd, Tata Chemicals Ltd, and Tata Global Beverages Ltd - via a total investment of approximately Rs.3,228 crores ($500 million). The deal has not been confirmed officially by either party. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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The deal

The purchase price of TTM's shares was approximately Rs.421 per share. The purchase price is at a 4% premium of TTM's share price of Rs.405.35 at the close of trade on Monday, September 18, 2017. Tata Sons held nearly 31.6% stake in TTM as on June 30, 2017. With the current acquisition, Tata Sons stake in TTM would go up to nearly 36%. Citigroup Inc. facilitated the block deal and was the advisor book runner.

Tata Sons also increased its stake in its Group Companies Tata Chemicals and Tata Global Beverages. Tata Chemicals and Tata Global sold shares in each other which were acquired by Tata Sons. Tata Chemicals sold Tata Global shares to Tata Sons at Rs.213.35 per share in a deal valued at approximately Rs.922 crores and represents 6.8% stake in Tata Global. Simultaneously, Tata Global sold its shares in Tata Chemicals to Tata Sons at Rs.642.55 per share for a total value of Rs.673.39 crores; representing 4.11% stake in Tata Chemicals.

Rationale behind the move

The deal is part of Tata Sons strategy to increase control of its individual Companies and simplifying the Group's structure. The strategy is being implemented under the leadership of the new Chairman of Tata Sons, N Chandrasekaran, who took over after the ouster of Cyrus Mistry. The aim of the strategy is to restructure its investment portfolio and to reduce cross-holdings in Group Companies so that any takeover attempts can be thwarted.

The deal would also help boost the share prices of TTM's stock which has taken a beating on the stock exchanges and has lost nearly 25% value in the last 12 months. Tata Sons has been increasing its stake in Group Companies including TTM in the last one year. Tata Sons had acquired nearly 2.89% stake in TTM in June 2017 via open market deals and nearly 1.7% stake in December 2016.

The investment comes days ahead of Tata Sons Annual General Meeting scheduled on September 21, 2017, where the holding Company is planning to seek approval of stakeholders to take the Company private.

Former Chairman of Tata Group, Cyrus Mistry, who belongs to the Shapoorji Pallonji Mistry family, was ousted from his position in December 2016, after a fallout with Ratan Tata. The relationship between Tata and Shapoorji Pallonji Group have deteriorated since then. In August 2017, N. Chandrasekaran had directed all Tata Group Companies to sever ties with The Shapoorji Pallonji Group.

Cyrus Mistry via Cyrus Investments, one of the Shapoorji Pallonji family's holding Companies, has opposed the move of taking Tata Sons private. His contention is that the move "amounts to oppression of minority shareholders". He has indicated that he would approach the National Company Law Tribunal (NCLT) against the resolution.

About Tata Sons Ltd

Tata Sons is a holding Company that is the major promoter and majority shareholders in most Tata Group Companies. Nearly 66% interest in Tata Sons is held by Tata Trusts, a group of charitable organizations chaired by Mr. Ratan Tata. The Shapoorji Pallonji Mistry family owns 18.4% interest in Tata Sons with remaining interest is owned by five Tata Group Companies (Tata Steel, Indian Hotels, Tata Power, Tata Motors, and Tata Chemicals) and the Tata family.

About Tata Motors Ltd

Mumbai, India based Tata Motors Limited is a part of the Tata Group and was established in 1945. It is a leading global automobile manufacturer with a product portfolio which includes a range of cars, sports vehicles, buses, trucks, and defense vehicles. The Company has a strong global network of subsidiaries and associate Companies, including Jaguar Land Rover in the UK and Tata Daewoo in South Korea. The Company has 20 manufacturing units in India and in UK, South Korea, Thailand, South Africa, and Indonesia. It also has design and R&D centers located in India, the UK, Italy, and Korea. So far, the Company has sold over 9 million vehicles and has an annual turnover of $42 billion. It is supported by a global team of over 60,000 employees.

Last Close Stock Review

On Wednesday, September 20, 2017, the stock closed the trading session at $31.84, slipping 1.18% from its previous closing price of $32.22. A total volume of 1.27 million shares have exchanged hands. Tata Motors' stock price advanced 9.68% in the last one month. The stock is trading at a PE ratio of 19.65. At Wednesday's closing price, the stock's net capitalization stands at $108.12 billion.

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