Holcim may use creeping route if open offer falters

Holcim might buy ACC shares from the open market through the creeping acquisition route if the response of shareholders to the open offer falls short of the 20 per cent target.

Rajeev Gupta, joint managing director of DSP Merrill Lynch, the lead manager to the offer, told Business Standard this is an option available to Holcim.

"We could buy from the market at the prevailing price along with the shares received through open offer. This is a practice followed in several other acquisitions and open offers," he said.

According to an analyst, Holcim is free to buy from the market during the open offer period provided it is paying the same price to the shareholders willing to participate in the open offer.

"If Holcim buys at Rs 375 from the open market during the offer period then it is bound to pay that amount to all the shareholders participating in the open offer. In such a case, the open offer price automatically stands revised. On the contrary, if the price in the market is below the offer price, then the acquirer has to pay that offer price," the analyst said.

Meanwhile, Gupta today reiterated that Holcim will not revise the offer price by a single rupee. On Friday, the ACC share had spurted past Holcim's offer price of Rs 370 on rumours that there could be an upward revision in the open offer price.

A National Stock Exchange broker said Holcim would be happy to have around 30 per cent stake in ACC.

"Holcim is likely to content with additional 15-17 per cent stake in ACC long with what it is controlling through Ambuja Cement India (ACIL)," he said.

Gupta did not indicate what stake Holcim will be content with. "We have already made it clear in the offer document that there is no binding on this," he said.

Commenting on merger & acquisitions (M&A) in India Inc, Gupta felt that 2005 is going to be the year of M&A. "There will be lot of activities in the field of telecom, cement, banking and infrastructure," he said.

"DSP Merrill is optimistic of repeating the performance of 2003 as far as M&As are concerned," he said. DSP Merrill Lynch had sewed up 16 deals valued at Rs 2,918.8 crore in 2003.