On Monday, the public announcement for upping the ante by either of the two parties in contention for 20 per cent of Indal's stake through offers and counter-offers would have to be published. Alcan has already sent in its advertisement seeking to raise the offer price by Rs 55. By doing so, the Canadian parent of Indal has committed to pay nearly twice the book value of Rs 90 per equity share.

The total cost of acquiring 20 per cent of the paid-up equity share capital of Indal -- Rs 71.11 crore -- at that price would be just less than Rs 250 crore. Alcan has already provided for a total amount of Rs 350 crore through a deposit made in foreign bank account.Indal sources were not availablefor comment. However, inside sources said that Alcan's major contribution to the company should still not be weighed purely in monetary terms, but in terms of the substantial management and technological inputs that the foreign parent has contributed over the years to Indal.

Sterlite Industries appeared to have decided that the price war in the takeover battle, at any rate, is not worth winning. The company's top executives, or their public relations agency Clea or their financial advisor Enam Financial Consultants, were not available for comment.

Alcan had set aside a much larger sum for defending its stake in the company, and appeared to have received a major boost for its bid two weeks ago when the government, through the Foreign Investment Promotion Board, cleared the Canadian multinational's bid to raise stake in the company from 34.6 per cent to 54 per cent.

It was also rumoured in the the financial markets last week that Sterlite was preparing a new application to Sebi to buy out a further 10 percent stake in Indal (in addition to the original 20 per cent it has already offered to buy through the open offer). However, with Alcan making a major statement through a substantially higher price, it may be difficult for Sterlite to retain its so-far aggressive posture.

The open offers, which started on May 4, are supposed to close on June 2. In the first three weeks, only about 2 per cent of the stock -- 1 per cent to each of the two bidders -- has come in. It is extremely unlikely that the financial institutions will now decide to sell to the lower-priced bid from Sterlite.

The institutions hold more than 36 per cent in Indal.The market price of the Indal scrip has risen already to around Rs 150, which is higher than the extant offer price of Rs 115 of Sterlite or Rs 120 of Alcan. It is expected that it will rise further once trading opens on Monday, for a new week, as the public announcement is sure to drive the scrip's price upward.

Market will have to square up

The stock market will notbe able to buy and sell on the basis of the new offer price of Alcan on a long-term basis. The Indal scrip is in a no-delivery period, and it will not be possible for buyers of the scrip to get the scrip transferred in their names. Therefore, buying from the market at a price lower than the offer price and selling out to Alcan is ruled out.

The market price of the Indal stock had spurted over the last few days in anticipation of a higher bid from either of the two bidders. The result was that the price had shot up way beyond the offer prices extant of Rs 115 and Rs 120 to around Rs 140. It is believed that when the market opens on Monday, the price would already have touched Rs 175.The result is that the punters who now speculate in the scrip will not be able to hold on to the scrip beyond the settlement, and will have to square up their deals necessarily. This is the only way the scrip may immediately reach its possible zenith (at Rs 175, the scrip would achieve its historical high).