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P Sreevalsan Menon
Mumbai, July 6: Xerox Modi Corporation (XMC) has approached financial institutions in its bid to acquire their stake in Modi Xerox Ltd (MXL) and Modi Xerox Financial Services Ltd (MXFS) as part of its open offer. Financial institutions including UTI, Morgan Stanley and GIC, mutual funds and banks hold around 13 per cent stake in these companies.
XMC came out with an open offer on June 17 to acquire the stake from public and FIs as part of the move to delist these companies. The company had said that the move followed a common practice among multinationals to be the only principal company on the exchange and delist all subsidiaries. Xerox has no other group company listed on any of the bourses.
In MXL, the promoters hold around 76.50 per cent while in Modi Xerox Financial Services, the stake is around 70.66 per cent. The promoters hold an additional 9 per cent in MXFS through associates but this does not qualify as promoters stake.
According to sources, the company had approached the FIs to give apresentation in the first week of July, which they termed as `encouraging'. ``"But we believe that the final decision will come towards the close of the offer on July 16,'' they added.
Also the response from small investors was good, they added saying that the company might have bought enough to delist the companies. ``Still the decision from FIs is awaited,'' they said.
The offer price for MXFS shares was Rs 100 while for those of MXL, the price was Rs 135. The share price of MXL on the Bombay Stock Exchange on July 5 was around Rs 139 while MXFS remained untraded.
The plan is to merge the listed companies with Xerox ModiCorp, an unlisted company and a closely held one between Xerox Corp and Modi Corp.
If the company manages to get around 13.5 per cent from public, the remaining shareholding with the public will be less than 10 per cent and in such an eventuality, the company has to make a second offer within three months on similar terms and conditions before initiating delisting procedures.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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