Fuller offer to buy 100 % equity in Indian arm

Wednesday, November 12 1997

Fuller offer to buy 100 % equity in Indian arm

ENS ECONOMIC BUREAU

MUMBAI, November 11: Fuller International Inc is making an open offer to acquire the entire public shareholding in Fuller India Ltd (FIL), formerly know as Fuller KCP Ltd. The acquirer group already holds 80 per cent of the equity in FIL.

The offer will open on December 22 and close a month later on January 21. FIL is engaged in the manufacture and sale of machinery, equipment and components for cement plants using the proprietary and latest manufacturing technology from its parent.

The voluntary unconditional offer to acquire up to 20,00,000 equity shares of FIL representing 20 per cent of the issued equity share capital is being made at a price of Rs 139.25 per share. The offer price of Rs 139.25 is higher than the minimum offer price for a public offer as stipulated in the takeover code, which is Rs 117.02, and is at a 32 per cent premium to the present stock price on the NSE.

The price being offered is the same as that paid by the acquirer to the Indian promoter of FIL - KCP Ltd, when its 40 per cent stake was acquired in March this year.

As per the public announcement, the offer is being made in keeping with the acquirer's corporate philosophy of wholly-owned international subsidiaries, in order to fully integrate operations globally. In India specially, Fuller International is keen on increasing the level of commitment and expediting the process of technology transfer. In view of these reasons and because of the secrecy requirements of proprietary technology, Fuller International has decided to increase its shareholding in FIL to 100 per cent.

The FIBP approval has already been obtained. The offer is conditional only to approvals from FIL's lenders the RBI. Shareholders have been notified that the profitability of FIL has been affected due to the depressed conditions in the industry in general and demand recession in the cement industry in particular. The turnover of FIL for the six months ended September 30 was Rs 26.01 crore and the company recorded a profit after tax of Rs 1.05 crore.