ICICI Bank Ltd. placed plans to sell its unit ICICI Home Finance Co. Ltd. to TPG Capital Advisors LLC on hold following disagreements with the private equity fund over valuation, Mint reported Dec. 12, citing "two people familiar with the development."
TPG Capital Advisors decided not to pursue the acquisition of the bank's home financing unit due to a valuation mismatch and the expected slowdown in the housing market, which could negatively impact housing finance companies such as ICICI Home Finance, one of the sources said.
This marks the second time ICICI Bank has halted the sale of ICICI Home Finance after doing so in April following a disagreement on price with potential private equity buyers.
ICICI Bank resumed the sale of its housing finance unit in June with TPG Capital Advisors as the sole suitor.
The lender had previously sought a price of nearly 24 billion Indian rupees, or 2x book value, but lowered it to 22 billion rupees as talks with TPG Capital Advisors resumed in June, the source added. However, when the sale was nearly finalized, Baring Asia, together with India Value Fund Advisors, offered a higher price of 24 billion rupees in August.
TPG Capital Advisors reentered the race to acquire ICICI Home Finance in October after talks with Baring Asia and India Value Fund Advisors deteriorated following disagreements over key operational issues, the second source said.