Aakash's minority stakeholders say no to Byju's shares

Chaudhry and Blackstone collectively own 30% of AESL, while parent Think & Learn owns 43%, and the latter’s founder Byju Raveendran owns 27%

- Ranjani Raghavan

Private equity firm Blackstone and the Chaudhry family, the two minority shareholders in Aakash Educational Services Ltd (AESL), have declined to swap their equity holding in the test preparation subsidiary unit with parent Think & Learn Pvt. Ltd (Byju’s), leading to a rift with Byju Raveendran and a potential impasse in the conclusion of a deal that was originally announced as a cash-plus-equity merger.

Chaudhry and Blackstone collectively own 30% of AESL, while parent Think & Learn owns 43%, and the latter’s founder Byju Raveendran owns 27%. Byju’s acquired Aakash in April 2021 for approximately $950 million in cash and stocks. The agreement then valued Think & Learn at $11 billion to benchmark the future equity swap.

Around 70% of the deal was made in cash, and the rest was meant to be adjusted against the equity of Think & Learn.

According to multiple people familiar with the development, both Blackstone and the Chaudhry family have written to Byju’s in the last few weeks, declining to comply with a Byju’s notice sent in March to execute the share swap as per the original agreement. They have cited clauses in the original share purchase agreement for doing so. An executive close to the development, on the condition of anonymity, said the agreement was fully enforceable and the share swap was not conditional.

A spokesperson for Blackstone declined to comment. Byju’s and the Chaudhry family did not respond to a query seeking comment.

While it’s unclear what direction the impasse might take, the development adds to the litany of woes plaguing Byju’s, whose founders had been talking up their ownership in Aakash as the leverage that could unlock liquidity through a potential initial public offering (IPO) in mid-2024.