Mumbai, Mar 12: Sterlite Industries' Agarwals are likely to make a higher bid for Indal next Wednesday, according to sources in Enam Financial Consultants, which is handling the deal for the company. The price is likely to fixed at Rs 120 per share.The revised bid comes after Alcan on March 4 decided to make a counter- offer for Indal's stake at Rs 105 a share. This was in response to Sterlite's offer at Rs 90 for a 20 per cent stake in Indal on February 16. The offer kicked off a controversy after both the Indal and Alcan managements termed the takeover bid as "not friendly". The sources added that the Sterlite management had decided on a higher bid after discussions with its investment banks. "Various options were considered and we have decided to respond to the Alcan counter-offer next week," top sources in the investment bank said.
They, however, declined to divulge details about options that were considered in the past few days, but said the Sterlite management was taken aback by Alcan's threat to pull out, and discussed the consequences.
"We do not expect this (sort of threat)," a source said. Montreal-based Alcan's chief financial officer Suresh Thadani had said that if Sterlite acquired a substantial stake in Indal, it would be forced to review its relations with India's largest primary aluminium-producing company and the extent of technology support to it.
Industry sources said that a revised price was arrived at and the Stertile board will soon meet to approve the it. About the price, Enam sources declined to comment, saying that it would come at the appropriate time. "We cannot say anything further," a source said. Meanwhile, financial institutions (FIs), led by the Unit Trust of India, Life Insurance Corporation and General Insurance Corporation are tilting towards Sterlite.
Industry sources said that the financial institutions were likely to "support" Sterlite's revised bid.
The institutions, who hold about 36 per cent in Indal, are playing a crucial role in the company's takeover bid.
Although both Alcan and Sterlite have made presentations to the inter-institutional board, constituted to look into the offer, sources said that each bid would be evaluated. Debt-service ratios, the managements' track record and servicing of interest payments by both the companies would be taken into account before taking a decision, they added.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
