Since they hold 15 per cent in ICL, they will have to decide their response to the rights. More important, they will also have to find an explanation to fit their response.

If they do decide to go ahead and subscribe, they will have a tough time explaining why they tried to block the bid in the first place by not selling (and making a killing for their unitholders in the process), since the forthcoming rights issue is meant to substantially finance the bid!At the moment, they appear to be clinging at the proverbial straws by raising questions over the legality of the deal, even as upbeat ICL officials were talking about a merged balance sheet for the current fiscal!Merchant bankers pointed out that sub-regulation 17 of Regulation 22 of the Securities and Exchange Board of India (substantial acquisitionof shares and takeovers) Regulations, 1997 states: ``Where the acquirer or persons acting in concert with him has acquired any shares after the date of public announcement he, shall disclose the number, percentage, price and mode of acquisition of such shares to the stock exchanges on which the shares of the target company are listed and to the merchant banker, within 24 hours of such acquisition''.

The regulation does not prevent the acquirer from acquiring shares once the public announcement is made. It prohibits such acquisition through clause (ii) of sub-regulation 8 of regulation 21 only in those cases where the open offer made is conditional upon minimum level of acceptance (ie, cases where the acquirer says that he would go through with the open offer only if he gets a particular minimum percentage of shares from public).

The open offer made by ICL does not have any minimum acceptance clause. The offer is for the mandatory 20 per cent and the draft offer document clearly specifies the intention ofthe acquirers to acquire shares outside the public offer.

The deal entered into by ICL and promoters of Raasi is an agreement to buy out the 32 per cent stake held by the latter at an average price of Rs 286 per share. The stock exchanges concerned have also been notified. Under the circumstances, ICL prima facie does not seem to have violated the takeover code, analysts feel.

Interestingly, situation of B V Raju was not very different a few days back. He started off by questioning the open offer made by ICL and its associates and then went on to question the validy of the takeover code itself issued by the Securities and Exchange Board of India (SEBI) and even moved court on the matter.

Now, according to the `friendly agreement' reached between the two adversaries, all the cases will be withdrawn from court. In fact, Raju has sold not only his original stake, but even the 1.98 per cent he acquired from ICICI on December 30 last year at little over Rs 100 per share!By now settling at Rs 286 per share,the man the institutions rushed to defend is richer by Rs 150 crore while leaving them to search for reasons to justify their decision not to sell.