Wadia, Bajoria in pitched battle for Bombay Dyeing

Wadia, Bajoria in pitched battle for Bombay Dyeing
ENS ECONOMIC BUREAU

MUMBAI, OCT 11: Textile major Bombay Dyeing, promoted by industrialist Nusli Wadia, is in deep trouble. Even as the Rs 1048-crore turnover company is busy charting out a strategy to entangle the takeover bid mounted by Calcutta-based jute baron Arun Bajoria, the latter has made it clear that he will take the battle to its logical end.

Sources in Bombay Dyeing say that the company is looking at all options including legal and counter offer to fight the unsolicited bid made by the Calcutta-based chairman of Hooghly Mills Company Ltd.

The company has already lodged a protest with the market regulator the Securities and Exchange Board of India (Sebi) against Bajoria who claimed to have acquired 14 per cent stake in the company while another 2 per cent has been bought by friends and associates. Bajoria has invested Rs 50 crore in acquiring 14 per cent stake in Bombay Dyeing and does not rule out a open offer, if necessary. Bajoria has also gone on record saying that he would demand a berth on the board of Bombay Dyeing based on his 14 per cent stake.

Fuelled by the takeover news, the company's shares rose to Rs 106 in a sagging stock market on the Bombay Stock Exchange (BSE) on Wednesday, up from the closing of Rs 103 on Tuesday. The company's share has consistently fallen from Rs 450 levels in the mid-nineties due to lack of direction and focus in the company.

On the other hand, in a reply to a BSE notice on the takeover battle, Bombay Dyeing has said that it is waiting for directives from the Securities and Exchange Board of India (Sebi) and Company Law Board (CLB) on a complaint filed by them against Bajoria's `illegal acquisition'. The Wadias hold around 31 per cent stake in Bombay Dyeing.

The CLB has already restrained voting rights on the shares purchased by theBajorias while Sebi is still studying the official complaint filed by the Wadias. CLB officials say they listed the case for hearing in November and proceedings will take place only after talking to both parties. The respondent company has to file reply and petitioner company has to file the rejoinder. Subsequently, the case will be heard by a two-member CLB bench in Mumbai.

Meanwhile, Bombay Dyeing said an explanation has been sent to the BSE, SEBI and CLB after a series of meeting with its legal advisers and senior company officials. Though Bombay Dyeing officially did not say anything about the raging takeover battle, insiders say the takeover battle over Bombay Dyeing is far from over.

Company officials say their defence is based on Bajoria's claim of crossing five per cent stake in the company and not informing the targeted company which does not meet the takeover code. The explanation largely talked about the company's determination to maintain its identity in the present form and possible measures to "thwart" such takeover bids.