Heidelberg to move SAT on Sebi order

HeidelbergCement has decided to move the Securities Appellate Tribunal (SAT) challenging the directive of the Securities and Exchange Board of India (Sebi).

This follows a Sebi directive, which had asked the German company to raise the price of the open offer for the shareholders of Mysore Cements by 25 per cent to Rs 72.50 a share.

Ambit Corporate Finance, manager to the open offer, has issued a public notice saying the HeidelbergCement "is preferring an appeal before the SAT seeking to set aside" the Sebi directive.

The Sebi last week had asked HeidelbergCement to offer the minority shareholders the same price it had agreed to pay to the promoters of Mysore Cements.

In a uniquely structured deal, Mysore Cements had announced on July 9 that it would allot up to 66.5 million equity shares, representing a 42.08 per cent stake, to HeidelbergCement on a preferential basis at Rs 54 apiece.

Also, HeidelbergCement would buy 13.40 million shares, amounting to a 8.48 per cent stake, from the promoter group for Rs 58 a share, excluding non-compete fee of Rs 14.50 a share. Heidelberg had announced that the open offer would be priced at Rs 58 a share. Ambit was advisor to HeidelbergCement.

In its directive on November 30, the Sebi had said, "payment of non-compete fee to the selling promoters does not appear to be justified".

Hence, it advised HeidelbergCement to "revise the offer price after including the payment of non-compete fee (per share) in the negotiated price".

Heidelberg had bought 50.1 per cent in the Bangalore-based Mysore Cements for $100 million (Rs 450 crore ).

Meanwhile, Mysore Cements is seeking shareholders' approval to issue preference shares worth Rs 13.49 crore to HeidelbergCement.