Mumbai, Mar 19: Autoriders India, a 9.51 per cent stake-holder in Saurashtra Cement, has made an open offer for 20 per cent of the company's equity at Rs 75 per share. It will, however, not be able to grab Gujarat Siddhee Cements, the 1.6 million tonnes-per-annum (tpa) Saurashtra Cement associate, which was widely believed to be a major carrot for the Patels of Autoriders.Saurashtra owns only seven per cent equity in Gujarat Siddhee, while the balance of the Rs 124-crore equity of the BIFR turnaround case is held through several other companies owned by the Mehtas, the promoters of Saurashtra Cement. Gujarat Siddhee's capacity is higher than that of Saurashtra Cement's one-million tpa. "We are not worried about the open offer, as the promoters hold over 50 per cent equity. Moreover, the offer price is also not lucrative enough," said sources close to the Mehtas, but did not spell out what the defence strategy would be.
Industrialists Praful and Mukesh Patel on Thursday launched an offensive on SaurashtraCement by making an open offer to acquire 20 per cent of its paid-up equity through group firms Maharaja Builders Pvt Ltd and Autoriders Industries. Assuming that 20 per cent is picked up, the total bid would aggregate to a Rs 18 crore payout. The floating stock of Saurashtra Cement with small shareholders is at 32 per cent.
The open-offer for Saurashtra Cements at Rs 75 per share is at a 20 per cent premium over Wednesday's ruling-price of Rs 62, and is not subject to any minimum subscription clause. On Thursday, after the open-bid was announced the company's share price hardened to touch Rs 66.50.
As per the requirements of the Securities and Exchange Board of India (Sebi)-prescribed takeover code, the acquirers have deposited 25 per cent of the total consideration of Rs 4.5 crore with an escrow account. The stock exchanges have also been notified of the open offer. Justifying the open-offer price, the public announcement document states : "The offer price of Rs 75 is higher than the average of theweekly high and low of the daily closing prices of the equity share for 26-weeks."
According to the announcement, Praful Patel, Maharaja Builders, and Autoriders Industries have already acquired 10.40.650 shares in Saurastra Cements, while Autoriders Finance, acting as "persons in concert", has picked up 1 lakh shares of the company. Together, the total shareholding of the Patels in Saurashtra Cement has touched 11,40,650 shares, representing 9.51 per cent of the company's subscribed equity capital, the announcement stated.
The acquirers, in the public announcement, have said the takeover bid is part of their plans to "diversify into the manufacturing sector." "The assets of the company are priced significantly below their future potential," the acquirers said, adding that the brand has not been performing in recent times. "The acquirers perceive that the company has substantial growth potential and can be turned around with the infusion of adequate funds, technology and professional management," statesthe public announcement.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
