The Tasty Bite stock, in less than a month, has already appreciated from Rs 19 to Rs 37 on the Mumbai Stock Exchange and has been hitting new highs, accompanied by huge trading volumes.

Apart from the open-offer to acquire a 20 per cent stake (4 lakh equity shares), Preferred Brands Foods India is buying an additional 50.92 per cent in Tasty Bite from its promoter Grand Foods and Catering. The agreement was signed on September 14, 1998, to acquire the latter's entire holding comprising 10.18 lakh equity shares at Rs 10 per share. Consequent to the open offergoing through, PBIL will hold nearly 72 per cent in Tasty Bite.

It may be pointed out that FMCG major, Hindustan Lever has acquired preference shares aggregating Rs 12.21 crore to revive the company. The open offer is scheduled to open on October 30 and will remain close on November 28.

The offer price at Rs 21.25 is more than 200 per cent the price Preferred Brands Foods has agreed to pay the promoters of Tasty Bite -- Grand Foods and Catering Consultants Private Ltd. The acquiring company is yet to seek clearance from the Foreign Investment Promotion Board (FIPB) for the transaction. The offer will be managed by ICICI Securities and Finance Company Ltd (I-Sec).

Preferred Brands Foods India, a 51 per cent subsidiary of Connecticut-based Preferred Brands Inc, was set up in February 1998 to act as holding company for downstream investments in Indian food processing companies through acquisitions and joint ventures. The US-based company is promoted by three non-resident Indians -- Ashok Vasudevan, KarthikKilachand and Meera Vasudevan in 1994 as a marketing and distribution company for natural and speciality food products. At present, Preferred Brand Inc owns the distribution rights for "Tasty Bite" brand in north America.

The offer price is based on weekly high and low of closing prices for the shares of Tasty Bite as quoted on Bombay Stock Exchange for the 26 week period, preceding the announcement of open offer. Tasty Bite was set up in 1985 to manufacture ready to serve food and frozen vegetables. The company has paid up share capital of Rs 2.60 crore consisting of 20 lakh fully paid up equity shares of Rs 10 each and 59,530 fully paid up 10 year 1 per cent non-cumulative, non-convertible redeemable preference shares of Rs 100 each.

Once necessary clearance from Reserve Bank of India and other regulatory bodies such as Securities and Exchange Board of India is obtained for the transaction, Preferred Foods Inc and Mauritius-based Nandi Investments Ltd proposes to capitalise its holding company to extentnecessary for the acquisition of Tasty Bite.