Sumitomo Mitsui likely to acquire 51% stake in Yes Bank

Japan’s Sumitomo Mitsui Banking Corporation is likely to pick up 51% stake in Yes Bank from the scam-hit bank’s shareholders. The Japanese bank is reportedly in talks with several key equity holders including the State Bank of India (SBI) which controls 24% stake in the bank. The SBI did not offer any comment.

It may be recalled that the Central Government had to roped in the SBI to recapitalise Yes Bank, which was in the verge of collapse owing to mismanagement by its erstwhile promoter. Several other commercial banks and LIC hold little more than 11% stake in Yes Bank.

Sumitomo Mitsui Bank plans to acquire 25% stake from the SBI and others and then make the mandatory open offer to acquire additional 26% stake from public shareholders as per SEBI norms, according to people familiar with the development. It had earlier sought approval of the Reserve Bank of India (RBI) to acquire 51% stake in Yes Bank but it is yet to be granted in writing. The RBI offered no comments.

Yes Bank has denied that it was in any talks with Sumitomo Mitsui Bank to be acquired.

Responding to a query from the stock exchange Yes Bank said, “The bank is on a growth trajectory and routinely explores opportunities with various stakeholders, which are aimed at enhancing shareholder value. However, such discussions are preliminary and do not warrant a disclosure …at this stage.”

“The information pertaining to these discussions [with Sumitomo Mitsui Banking Corporation] as set out in the [news] article is speculative at this time and are not factually correct,” it said.

Following this clarification, the bank’s shares which had gained about 10% in the morning after a news article, reduced to about 1%.