Tata Motors is heading towards a critical deadline in its attempt to complete the takeover of Italian truck maker Iveco, its biggest deal yet. Trouble could come in the form of three institutional investors who are yet to surrender their shares in the tender offer launched by Tata Motors. The acceptance period for the tender offer gets over on October 26.
The three investors are hedge funds Davidson Kempner and Syquant Capital, and activist investor Petrus Advisers. The three were reportedly unhappy with Tata Motors' initial offer of 14.1 euros per share for Iveco. The offer, they said, undervalued the Italian truck maker. The investors have also claimed that Tata Motors is yet to adequately share the long term synergies arising out of the deal.
To address the concerns, Tata Motors had increase the offer to 14.4 euros a share. But it's not clear yet if that is enough to get the approval for the three investors even as time seems to be running out. Tata Motors can extend the tender offer deadline, which may give it some more breathing space to convince the investors. That will be important because Petrus has maintained that Iveco's fair value is at about 18 euros a share.
This is the final, but key, hurdle for Tata Motors. It has otherwise secured all regulatory approvals for the deal. These include approvals from the European Central Bank, UK's Financial Conduct Authority and Bank of Spain. The offer document has also been approved by Italy's securities market regulator Consob.
Tata Motors will be hoping to close the 3.8 billion euros deal at the earliest. It has already missed the initial September 2026 deadline and is now expected to close by the end of the year. That is, if the investors oblige. The deal was first announced in July 2025.
The three investors together hold 20.4 per cent in Iveco. That's only second to the shareholding of Iveco promoter Exor. As per the regulatory requirement, Tata Motors needs at least 80 per cent of Iveco shares to be tendered before the deadline. The threshold was reduced from 95 per cent at an Extraordinary General Meeting on October 16.
A Mint report said the three investors would stand to gain 350 million euros from the sale of their stake. This includes 288 million euros in extraordinary dividends from Iveco.
The deal is crucial for Tata Motors, which is looking to expand its global operations in the commercial vehicles space. The Indian auto major has a limited presence in Europe till now, whereas Iveco is one of the leaders in the local market. Iveco will also ease Tata Motors's transition to cleaner transport technologies. Apart from commercial vehicles, Iveco also has a considerable presence in powertrain systems and specialty vehicles.
Investors in India had shown their concern when Tata Motors first announced the deal in 2025, with its stock falling by nearly 4 per cent. Though the company has since regained the lost ground, the coming days will be crucial if it wants to win the deal. Indian investors won't be amused if Tata Motors further raises offer for Iveco as that may increase the debt burden on its finances.
