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    15 views14 pages

    Valuation Report Corporation Bank Union Bank

    Uploaded by

    Abdullah Pathan

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 14
    ae an Gujarat . CV Raman Mager, Union Won of tna carperate oes, ‘angle Tarp Roa, S305 Shauna sai, Pansestae, nda " ints ‘Suh: Recommendation of the fair equity share exchange ratio for the proposed ‘amalgamation of Corporation Bank int Union Bank o ind eae Madam / Se, \Woreter tothe Service Level Areement appartment eter (gether refered to 8 “Enoageent eter needy, 1+ Union nk of nd (neater ferret a8 "UB") has appointed Debt Haskins & Sls (erenaer er te 25 "OFS" vide the appointment le ded 24 December 2019 (et: CAD / 2010 2019), an Service Level Aree dtd 03 January 202; and + Corporation Sank ras appdintea Walker Chard & Co LLP (heeer refered to as *WOC% vie the amr eter dated 17 December 2019 and engagement ter with eet {or recommendation of he reat share exchange rat for the proposed amagematien of ‘oraraon Bonk it Union Bank of na (haranaer ony referred te ethe"Bonks) ona gong cer ss wh fect rom sun ate a aprove byte Banks and Government of eee relevant autores. ‘The Fr Equty Share Exchange Rai forthe repr rfr to nner of coy shares of ace vue 107 e06 of Union Bank of In, wh would be ised to the equity sharehlders of Corporation Bankin Bev othr eat shareling in Crporation Bark pursuant to the propeced “smoiomaton (herlaterferred to sar Ely Share Exchange Ratio’. Detote Hasine 8 Sale Walker Chandiok& co tL ‘Fs and WCC are hereinafter oy ferred 98 “Values ewe" usa nda ferred ‘to as"Valein this rt Fat Equty Share Exchange Rato ep (Share Exchange Ri epee” othe Rope. Union Bont ona was ude i 1919. 1s a naonataes tank wth Governeent fla ling 86.7% stake ad alaca stab ld by ttn and pub sarholers sat he Reor dae tha rept candied ttl revenue ae prot / ss ater ta of INK 393,54 mili rd In (29,223) miton respective, fr the year ended 31 March 2019. Axon 30 September 2019, Bt had 4,282 ranches Is nd 3 oreian branche. Adon, UB has subadas /Je venture enpape in asct management ad surance busines Corporation Bank was funded n 1806, 6 2 navonleed bon wth Goverment of Ina tng 93.5% tae ond balancestake sald atta ang pubic serehollers sat the Report ate hed reported consoled total revenue and rot os) afer ax of NR. 175,041 mon and It (63,252) millon resecvey, fr the yar ended 21 Mach 2019, As on 30 September 2019, ‘orpration Bank nd 232 benches Adon, Corporate Bank Nas assy engaged in {he brokerage buses ‘he egy shares of UninBank of Ina ae Carpozton Bank are Ise on the National Stock ‘tetok ankng product and serves. (on 30 august 2019, the verano ra propose an emalgaton of Corporation Bank Uno an of nd. The sd proposal ws accorded in pre approve by he Board of Oretors othe sai banks wth fet om sch dato tot wl e approved bythe Bs nd ether elevnt hors pursuant to multions unfer the Banking Compari (Acquistion and Treen of Uncertain) At 1970, Bonkeng Coane (Acuston and Tense fUnderang) Act, 1980 ‘2nd elevart SEB regulations, as apleabl, The proposal envieses, tra, te malgsmation ‘of Cperation Banik ito hon Bank of na, whereby eqity shares Unan Bork of a ml be ‘ssved to te sharsotiers of Coporaton Sank (hersnaer reered to. er “Proposed ‘mapa. "23 nth conection, Union Bank of a and Corpraton Bank have app is and WCC respecvey to suit apt rept on the Fl Esty Share Exchange Ratio Ths Rept wil be Placed before the Aust Committe andthe Sood of srs (he "Boer fhe respective Bonk ‘2nd produced before goverment equity or all autores, in onrction wth the Proposed ‘Amsloamation fo the eter andor requted under appa avs of ne cue ee 20138 Datote Haskins Sete Walker Chandi & co LLP he seape of our src i to conduct 3 relive fle (ond nat abso) vito of the eauty ‘ores oF the Banks, witout cnsdarng the ete a Proposed Amaigeration and seprt ot Far Eauty Stare Exchange Ralo forthe Propced Aalgamation in scodance wth genera cepted profesional stands ‘The Valuers have Been sponte several and ot fit and Rave worked aden inter ons The Voluers hve reve ivoratien and caicatns rom thi respective ae, The ots hove independent red at deren vals per saree the Banks However te anv ge ‘he consensus nthe For Eauty Share Exchange Rat forthe Proposed Amara, apyeograte Iino aahstmets ong of hasbeen done in the values reed a the Volare, ‘Te Vers have cosdred anc veeation os cand approptte by the inter respective ens. The Valves have taken into conieation market porametersprecatng the ‘ate fhe announcement ofthe mere i 30 August 2019 and the curere mri paraters 235 considered aporoprite nthe respecve ole and made acs frntornation made ‘om 0 us by the manatements ofthe Banks (Managements) ithe dieof ths Report whch withave & veanng onthe valton nays. The Managements hav informed stat since the st ary eit wre decree Reprt dat here ae nouns eben evats events no the narmol course > buns in ase a the Banks mater Inpactig the opering 7 animation tne performance, Further, the Managements have Inermed that of ater nerman inpacing the Banks has been doe tus We have rales onthe ove i rig atte Fa Egy Stare Exchange Rat fr he Proposed "is Report aur etverable In esp of our recmmendaton ofthe ait Eat Share Exchange ator the Pepoed dpa, ‘his Reprt and the xoation contained in is able confntil ee tended ol forthe ‘le use and infrmation the respective Boards of he Banks and el in connection wth the Fopose Arlaamation induting forthe purpoee of etanng regulary approval, as reid nde apo awsof nda, fr the Proposed Amalgsmation, Wout ning he oregeng, we ‘nderstand that the Boks maybe requires te share this Rear wth govern reultnyot ‘tical autores, their resins advisers incucig merchant bankers prong ane pon onthe Far Equty Share Exchange at, n connection wth the Prpoted Aalpamation peter "Perma Recent), Wehereby ave consent ta sch dose thi Repo, on he Satta {he ols ome responsibilty t the respecwe Banks ha ave engaged us, ner the tere ot thei respecive engageren, and no ote person; and that, to the lest exter perme bye, ‘he Vols eect no respons or abily to anyother party, in comnecton wh i Rept 'e etd ta reference ths Rept inany document ao ig wth Permits Recipe, n ‘tonection we he Popsed Amalgamation shal ot be deemed be anaczapance byte Vans eo See ‘fay respraibity oF iby to any person / party ate han the respective Bonk wh have pole us. ‘er report cn be set the Bans nly forthe purpose, ainda i th rept fr wich we have been appoies.Tho rests of eur alton anys and aur ep cant be edo eat ‘te Barks for any thes purpose oF by any ether arty or any purpose whatsoever Weare rat ‘espontetoany othe son / ty fr any den of sich person / purty based on this opr ‘oy parson / party ntecog to provide france vest nthe shares buns te ane ty hoking companies / suse /assocaes/Investee compares ether fap campo, en, ‘hol ds ter sekig ter ew frofessonal ace andar caryng ut ther om doers Procedies to ensure that they ae mang an iermed dion, any person / party (ther than ‘te Bak) chooses opie race upon any milters nce in the report they hen do ae ther own 1k a witout recuse te te Vales I hereby note ta weap, renecion tron create, epying otherwise quoting of ts repr any pa heen, except fr ‘te purpose a Stout earn this report, without our pir wien eotent not permted, nes ter stator elt eqiremen od ‘his Report subject to he sop, assumptions, exits, tations an ddamersdetaled hernater.As sh, he Repro be readin tty, and at in prs neni th the + Unoued reviewed resis fer he ha-year ended 20 Seamer 2019 an quater ede 31 + Adjusted Net Wort ofthe Banks 262 30 September 219, proved bythe Bake ing to nsideaton the ancl ang tx gee adjustments aged Ucn the Bae, + Remi reports up to 31 arch 2019 and summaresfnancl omatin upto 30 September 2019/31 Deceter 201 a apoeabe of he msds / ot verte snore uty investment fhe raspatve Boks +Other relevant infra and documant forthe purpose ofthis encasement. ‘We hve at obtained weston, norman a representations, which we Bbved were ‘reasonably necessary ond rev frou exer a the Managements of th Banke Theta ‘ve been provid with tbe ompounty to revew the a report (excdng te recommended Fi Eu Shoe Exchange Rati) or ts engagement to make sure the facta! Incas / ‘The Bonk nove formed us that Ernst & Young Merchant Banking Serves LP and ROSA Cpt ‘Norse LP nave been anziniad by Union Bank of nda and Carporation Bak renga aL -* rove fess opin nthe Fl euty Share Exchange Rati othe pups o he Papas ‘Anolgmation Further a the request of he Banks, we hove had discssion wth the rapectve assumptions made by us ‘SCOPE LIMITATIONS, ASSUMPTIONS, QUALIFICATIONS, EXCLUSIONS AND DISCLAINERS Provision of valuaon opinions an consideration ofthe sues descbed herein are areas f eur our proces. The series do not represent acrounting, assurance, accounting J tak ie gence, onsting ott related series that ay eter be proved by ws or ou aan. ‘The recommendation conned herein nt intended to represent vale at any tne the han te of thi Report We heen igen to pda th repet ‘his Reports contents ant the ets heen are spe) the pupa vin agreed at bere terms of ow Engagement eter) he dt ofthis Report anit) re baad on he sce oF unoudtes reviewed tani statements ofthe Banks upto the Report Det, at canidred poopie bythe respective Valuer. The Management has represented that he business acts OF the Bnks have bee cari out eral and edna couse betwen 31 March 20:9 and ‘e Reo date a hat ro mater change has exe inthe respective operation between 91 March 2019 andthe Repot dat, ate na ta ire bythe Management mertoned Viton ons an ests are peti to the purpose vation and as er the apr tes the respective ergogeents tay fot Be vl fr any Ot purpose ora tary ate date wees mn ater. TH Reprised onthe underanding tha the Managements ote Banks ve drown ourateston alte ates, whieh thay are aware af concning the ancl pontion the Donk a ay the matter, when me hove a pct on our aon on te ar Eau Stare Exchange Rat forte Proposed Aalgaeton, Everts occuring afte the cate nero! ay afl ths report ad the asumtins wed in repatiog "ad we domo assare ary ebgation out, revise reat ths ep. "nthe cours ofthe valuation, we were rovied with bth wien and verbal vormaionineing ‘market, tec anéopesaing eta. I accordance wth the terms of ur respective ergogement, RR om mest een ai \ ges oft Ky o oy Delete Hoskins & Sli Walker Chandi 8 ¢o LL? ther means 98 may e alle and aataie, we Rave asain and oad pon, what Indepenerty vetrng (i) he accroy of the formation hat was guava sourced rm ‘ubsonbed detabases and formed a substan! base fr the Report a (i) the ees et Inkarmation made va to by the Banks Whe Iormaton bine fa the pe domain or extemal sources havent en veri fer autertichy, aciracy or completeness, we have nines rom, a fas posse, rm source ners considered to beetle, We sine ‘cordance mith the austng standards aptable in Indi, accouming/ finn / commer / legal tax /enrnment de diigence or fre / investigation serves and does once ‘veriiaton or valiton work. In accordance with te terms of aur engegemert/ appointment letters ndinacornce wth the cistamaryappeuch ated in vain exrcies, we have not ude, evened, cet, cared outa de digence, or these iwesigted the hte! noni nancial inforotion onda ast rhs proved ou rearing the Danks 1 sbsiory /assocotes fot vetures / estes conpacies. Accordingly, we 6 nt expect an non o oer ay orm ct assurance regarding the truth an faimess of the ancl poiion at Insts in ch nto francs / Tan aemens Ako, th respect to exslanatons and norman sought rom the Banks, we ave Deen gen to understand bythe Banks tat hey hove ot omitted any relevant and matrlfators and that hey have checked the relevance or ‘moteraty of ony speci itormatn to the preset exer wth us cate of any dont. Out ‘ncn Is based onthe assumption are iormation sven by / on Behalf the Barks, The respective Managements othe Barks have Idee 0 oth they have uerstod tha sy onions, Imciraces or rsstatements ay mtr ur vation analy eu The Rapat asus that he Banks comply aly wth even ls hd egutnsapplabe nal "seas of aperton nes eters ata, tht the Barks wl be mono In competent and response manner, he Report ‘ncuing estes of tga Se ae comptes with ce lms, ae Hgaton an elhe cottage aanies that are nt cosa in the ousted /unsude blanc shets fhe Bank ubidry ‘esac | on venues vaste cmgane,2. Mo investigation of Union Bark tn’ ‘snd Corportion Bank's (rl investe companies) em toe set hs teen made or the ‘urese ofthis Report ans Udon Bank of Indias and Corporation Bon (or Ur teres ‘empnis) cinto sch ts hes een ast t be vali, Ho consideration has boon gen to ven 0 coneration to mater of 8 tepa nts, ur Report not ar Sho Ie carta a Ov pining or cering the carpane ofthe ‘Proposed Amoigematon wh the poor of any low / standards nna Banking, freon ichange reyuawry, eccunng ane taxaton (acing traser pic) las / sonar or ‘egorés any economic rane, legs, accounting or tration enpeatons ar Hes ang fom sc Proposes Amagamation ‘Reports ot, nor haut Ibe consted as our econending the Pepa Amalgamation arvtig consequent thro reautinatertom. The Repo does pot sare te malate Wa rage sor36 Delote Haskins 8 St Walker Chandi a co LLP Charred Acauntants Chea Aceon ‘ments ofthe Proposed Aralgumation 35 compare wth any ster aerate or wth o at ‘suc aerntes cul be achieved o re aval. Any deci bythe Banks he sero ators rearing wheter ot proceed wth the Pepsed Amalmatin shal res sey ith therm. This Report dos ot in any manner adie, pie one ectrend the ee at meh ‘he scutes ofthe Banks cul or shoul areata flowing the arauncement / constmation of the Proposes Analganauon and we express no opian or recrmmenaton a to how the Shoroolders of eer Barks sould wae at any sharsholers mess) tobe held in connection with he Roped Amalgamation. The recomenndstion() rendered nts Report ony repent ‘ur recmmendatins bee upon rmaton und bythe Banks (rks epresettves) ad tor sauces andthe saldrecommendaton() sl be considered tobe nthe ature of oining econ or as roving ranagemen series or cnyeg Ok management fntions, for wich speci opon ects oO ake om expert avers xcept in respect of cera equ investments ofthe Bank, we havent conducted or roided on nays for any inal set ails and have why relied on information proved bythe The ee ou eatin anys an the Report lne antigen spon the resus reported ‘015 owes responsity to only the Gourd of Dros of Unon Hak ef da and WC Ones ‘esronsbiy tan the Beard of Decors of Corporation Bank hat Neve respectively append Ut ‘der the em for respective Engagement ete ar rabody ee We ml NB Nae fra loses, crs, damages cribs rng oto he actos tke by arson of revs ven an eer tothe Bas nv event shal wee able or ay bss, dares, eat oe exper ‘ab nan way tom fraaen acts, misrepresents or will eau on par he Bank, thee res, employees or ages Inno eunstances sale aby of» Var partners, "ts decors or empioyes, att th servis provid In connection with he engagement vet ut ts Report wl exceed the amount po Sch Valuer in rspect ofthe feos charged by for eae serves, Wego not sre any Hitt any ha ary in relaion othe se ths Report. uncer {hat his aos does net earesent fees anon. Ths Report snot ubatate fxte thed ‘arty’ Onn oe gence appraisal /enquies/ independent advice thatthe thd party shad undertake for his puro, ‘Nother the Repu rors contents maybe refered to or qt in any restrain statement, brospects, fe memorandum, anual report, lean agreement othe greemento document Page of 4 Deeite Haskins a Ste Walker Chandi & co LLP ‘haere acount ‘areres acount fry decrees ay able neni between te otal th su he unt te are et rounding of ‘SHARE CAPITAL DETAILS OF THE BANKS on Bank of Ena ‘fe #20 Stotber 215, hp up ogy tare opal of UB wes ~N 17,630 lon conetng 9 1,763,016,314 eaity shares of ace vate of NR 10/- exch alps op In Octber sore te Goverment of ind isd tna catalina UB and accord 165900298 sree gg ated apa sch nso, Subsequent th pid up ay shee cat of sinh seen Iman conssng of 3422,218,052 omy hares of face vale OF INA 10/-eah ly psu, ven, ‘me hove conser for the purpose ofthe present valuation anys. The Henogeent oy unon Banko Ta hes informed us tat (thre would na i any capt vriton snc tont meant ‘Revert date he Propaed Amalgamation becomes fletve mia approval eth obereo, ans ser relevant Ehsan (Hey would Yt dee any ddend wee eter fre tan tase dete inthe pst ew years ‘Somoration Bank ‘sa 30 Sexton 2019, the pad up equty ae cat of Corporation San wes INR. 1,988 illoncnssing of 598,104,034 enty shares of face value of Rech Ry pau, wren ve have corse forthe purpose of the presen valuation ania The Menapenere ot orton Sr hes iforned us at () there woul ot be ay apa variation tre Ban ese the Report date tthe Proposed Amalgamation becomes eect. thot appre af ne starsollers an ether ean autores an (they mould nat dale ey cn were [APPROACH - BASIS OF AMALGAMATION The Popes Amaia envious amalpmation of Corporation Bank no Union an of na wher equty shares f Uren Ban of nda wile sed oe ely starters ef Coren sank ‘ng te Far Egy Share Exchange Rat forthe purposes of amaigtmaton sch the Proposed Amalgamation, west equte determing the rete far valor e each book mache ‘ant of thi equty share. These vals are tobe determined independently btn ante ove, Walker chandlok& co LL ‘Chartered Accountants Chore Asuras The tee man valustan apptcces ae the markt apres, Ince approach and eset income aparosch an asst anproach fr deter the relative ava ety shares wh ‘an be considered inthe present case, to the ete relevant ond splay a bjt tothe tity o deta imation to are the Fai Equity Share Exchange Ra fr the prpone ofthe Proposed Amato, sch a: 1. hat Appoee Me est Vue (NA Hetod 2 Ince Aporeach 48) Dcowted Cae Flow (OC ethos 1) amir capratzatn Vl (ECV Method 3 Maka gprs 2) Maree Method 8) CompuratieCompanes Multiple (CCH) Method "soul be understood tht he valuation of any ent os sess nherenysbjecve ane bet to ncrtanies and crtngnces, alo wich ate fet pret an ae yond our onto In perfoming or ana, we made assumotons with respect to indy prormance an gereal ness an ecoremccontins, many of whch ae beyond the conto the Banks In ton ts vlan wl nua wth changes in pew markt conde, the condone ‘snd prospes ancl ar otherwise of the Banks, ae terete whch general infer the | done, Atough sient values may ex for aferent purpose, canta be too tangy tmabasized tata value an ony ave a one valve fr ane purpose. Our eho of meta \olation has een anved at wing uu nd anventiond methods adopted for ansaton a+ sim nature ond our eteable jugmen ia an independent end bons ie mans baked on ut revaus experience of aseonment «simi nature. ‘Under this sppase, the et asset vale meted is cose, which is base on the undying ‘ret assets ad bites ofthe company, aig into account aperiting assets a Rabies on ¢ ook vale bass and aden as considered aotranit hy especie Vales {Income Approech: Icom approach s 8 alain approsch that cnr manna or ftce fanouns (62. 8h News or income and exarsee) to singe cent (he, dscumed or Ceptaleed) moat. The vue measurenar ke determined an the basi ofthe vue dates By ‘rot markt expectations abet toe tire amount. Samy cs a age 9 of 34 Walker Chandi & co LLP * Discounted Cash Flow (DCF) Method: Under the OCF mnethad te projected fee cash ms Sch OCF analyst volves determining the aon ‘stimating tre he cash fos: Fes cath flo ae the cash fms expected to be generated bythe company that are ‘volte tothe provers ofthe campy’ cata - bath det and eat, ‘Aporrite cont ate fo be ppd cash ows Le, he cos apt "Ts dicount rte which oped to the He ah Nows, shoul ete the ppartunty cast to the cpt overs comme shaetlders end edo), weighted by tar ee

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