Mumbai, June 5: American multinational Schenectady has made an open offer to the shareholders of Dr Beck and Co (India) Ltd to acquire up to 14,17,537 equity shares (representing up to 20 per cent of the issued equity share capital) for cash at a price of Rs 57 per share.The offer price of Rs 57 per equity share is higher than the current market price of Rs 51.35 (as on June 2, 1998 on the NSE) and the 26-week average. It is also higher than the price per share allocated by Schenectady International Incorporated (SII) for the 51 per cent stake in Dr Beck, as per its global purchase agreement with German multinational BASF AG.
The average of the weekly high and low of closing prices for the equity shares of Dr Beck as quoted on the NSE for the 26-week period ended on May 29, 1998, is Rs 48.78.
The open offer follows the BASF group's decision to divest its holding in Dr Beck to the $300-million SII on account of a global reorganisation of its coatings business, which includes the sale of its business ofBeck Electrical Insulating Systems in Germany, UK, India, Brazil and Spain. The sell-off has helped BASF focus on core businesses like automotive and container coatings.
Dr Beck AG and BASF AG together held 51 per cent in Dr Beck & Co (India), while the Mahindra group, co-promoters of Dr Beck, holds 22.29 per cent of the company's share capital. Dr Beck has a paid-up equity capital of Rs 7.08 and registered a turnover of Rs 36.26 crore for the six months ended September 30, 1997.
The offer, which is being made through the American company's 100 per cent subsidiary, Schenectady (India) Holdings Pvt Ltd (SIHPL), will translate into an outgo of Rs 8.08 crore for the entire 20 per cent stake. SIHPL is the holding company for all SII investments in India and has a paid-up capital of Rs 3 crore. SIHPL is in the process of acquiring 51 per cent stake in Dr Beck.
The offer, being managed by DSP Merrill Lynch, opens on July 23, 1998 and closes on August 21. If, as a result of the offer, the public shareholdingfalls to 10 per cent or less of the equity capital of Dr Beck, then as per the takeover code, Schenectady will make an offer to buy out the outstanding shares within a period of three months from the closure of this offer, at the same price. This may result in the delisting of these shares.
Dr Beck manufactures a wide range of products in electrical insulations, construction chemicals and automotive and container coatings at its facilities in Pimpri near Pune in Maharashtra and Ankleshwar in Gujarat.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
