According to sources, the panel - comprising SM Datta, NJ Jhaveri and Deepak Parekh - met recently and advised Alcan to better the Sterlite offer if it wants to retain its hold on Indal. In effect, the panel has admitted that the Sterlite offer is much better than that of Alcan and the Canadian company can only thwart the Sterlite bid by offering a better price. The only way Alcan can retain its hold on Indal is by striking a negotiated deal with the financial institutions at a higher price. The deadline for entering into such a deal expires on June 1.

The Indal board had set up the committee of non-executive directors and eminent experts immediately after the first bid from Sterlite Industries had come in at Rs 90 per equity share of Indal.

The board was given the power to meet the rival bidders for Indal's stake and decide on aline of recommendation to the Indal shareholders.

After meeting both sides, Sterlite Industries and Alcan, the three-member committee had come to the conclusion that it was in the interest of Indal shareholders either to sell to Alcan Aluminium, or to hold on to their shares. The committee all along felt that Sterlite would not substantially improve the management of Indian Aluminium.

By advising Alcan to top the Sterlite offer or give up Indal, the advisory board has thrown new light on the takeover drama.

It has admitted that pricing is the most important factor.

At the initial stage, the three-member committee had not considered pricing as the sole deciding factor in calculating the worth of the rival bids. The three-member committee first met at a very early stage in the proceedings when Sterlite's outstanding offer was no more than the book value of the company at Rs 90, and Alcan had just topped that offer with an offer of Rs 105 per equity share. On behalf of this committee, Datta, who has beena non-executive director of the company for more than a year, had addressed a joint press conference with the Indal management, where he had sought to support the Indal management, saying that they were not to blame for the perceived reverses of the company in recent years.