The Tatas, promoters of paint major Goodlass Nerolac, has decided to sell their entire 28.56 per cent stake to Japanese partner, Kansai Paint Co, for Rs 98.56 crore. The divestment will be at a price of Rs 250 per share.
The move marks an exit for the House of Tatas from the paints business.
The Tatas' holding was through a group company, Forbes Gokak Ltd (FGL), which is into diversified activities.
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With the acquisition, Kansai will increase its shareholding to around 70 per cent from the existing 41 per cent. Financial institutions hold around 16 per cent and the public the remaining
14 per cent.
The proposed transfer is in accordance with the terms of the original shareholders' agreement between the two parties. Accordingly, either of the joint venture partners is required to offer their shareholding to the other in the first instance, a Tata Services release said.
The news was received positively by the stock market with the scrip closing at a 52-week high of Rs 248.15 on the Bombay Stock Exchange.
The proposed transfer of shares in Goodlass Nerolac from Forbes to Kansai will not attract provisions of the Securities and Exchange Board of India's takeover code. Kansai will not make an open offer for the acquisition will be exempted under Regulation 3 of the code.
The selloff is linked to FGL's own plans in its existing and related businesses, which would require large investments. FGL has decided to utilise the realised funds in a manner which would directly benefit its own shareholders.
Goodlass Nerolac has maintained a consistent market by supplying 92 per cent of Maruti Udyog Ltd requirements and 95 per cent of Telco's. ta name="description" content="The Securities and Exchange Board of India (Sebi)-appointed Kumarmangalam Birla committee on corporate governance has in its draft report finalised on Thursday said financial institutions should stay away from boards of companies and seek a slot only in the event of an impending default on loans. ">