Grasim offer for UltraTech TemCo closes today

The A V Birla group flagship Grasim Industries' open offer for acquiring an additional 30 per cent stake in UltraTech CemCo, Larsen & Toubro's demerged cement business, will close on Monday. The open offer, priced at Rs 342.6 a share, began on June 7.

Grasim currently holds a 12.6 per cent stake in the UltraTech CemCo. The open offer, if fully successful, will increase Grasim's holding to 42.6 per cent.

Grasim will then purchase an additional 8.5 per cent from L&T at Rs 342.60 a share to take its holding to 51.1 per cent so as to acquire management control.

Grasim is expecting to accept 44.5 per cent of the shares tendered in the open offer in case all stakeholders offer their shares.

This is the highest acceptance ratio compared with other open offers announced in the past.

With Grasim and L&T not participating in the open offer, out of every 100 shares offered by other stakeholders, 44.50 shares will be accepted.Financial institutions (FIs) hold a 29.8 per cent stake in Ultratech CemCo. The FIs have agreed in principle to participate in the open offer.

Given the acceptance ratio, it is expected that the FI's holding in the company will decline to 16.5 per cent, after a successful completion of the open offer.

UltraTech posted a net profit of Rs 38.83 crore for the year ended March 31, 2004, based on a turnover (net of excise) of Rs 2,262.84 crore. On a consolidated basis, the company had posted a bottomline of Rs 17.31 crore on a turnover of Rs 2,292 crore.