Mumbai, Feb 25: Indal has appointed an independent committee comprising non-executive directors to examine the merits of the open offer floated by Sterlite Industries for a minimum 20 per cent of its stake and recommend a line of action to the full Indal board, which meets on Thursday.The independent team has already considered the pros and cons of the offer even as the Indal scrip caught up in the markets on Wednesday with the offer price. Sterlite Industries made it clear that it "is not even thinking in terms of revising upward the offer price."
Sterlite made a sudden bid for a minimum of 10 per cent stake in Indal on February 16 (the offer was later revised upward to a minimum of 20 per cent following a Securities and Exchange Board of India directive). Indal's independent committee is examining the terms of the offer announced by Sterlite Industries on February 16. According to Sebi guidelines on takeovers, the board can respond in one of three ways to the open offer: it can recommend toshareholders to sell its stake in response to the open offer, not to respond to the offer or reserve its judgment and allow the shareholder to exercise his or her discretion.
The committee, which is believed to be headed by the company's non-executive chairman Sushim Mukul Datta, will recommend one of these three options to the board which will meet at the company's office in Mumbai. The board will thereafter issue a statement which will indicate to shareholders the formal position of the professional management which runs the company which is 34.6 per cent-owned by Canadian aluminium giant Alcan.
The company's financial institution nominees will carefully evaluate the offer. ICICI executive director and former nominee of the institution Lalitha Gupta resigned from the board last month (in a development unrelated to the bid), and a replacement may be drafted in, sources say.
Although Indal sources were tightlipped on what the independent committee will recommend to the board of the company, it appearsthat as things stand, the financial institutions are prepared to go with the existing management. It is believed that a presentation is proposed to the financial institutions on the quality of the existing management, and basic data on the steps taken by the management to arrest problems of high electricity cost and primary metals supply.
Meanwhile, Sterlite Industries finance chief Tarun Jain said that under no circumstances is his company thinking of raising the offer price it had announced around a week ago of Rs 90 per share of Indal. "We do not wish to respond to media reports in this regard, and we are not even thinking of raising the offer price already quoted."
Alcan's nominees, led by Suresh Thadani, have already arrived in Mumbai. They have interacted with the non-executive chairman, and it is believed that the Indian management have also interacted with the company on the issue.
Copyright(c)1998 Indian Express Newspapers (Bombay) Ltd.
