Chhabria, Mallya bury hatchet

Herbertsons open offers to be revised

Liquor barons Vijay Mallya and Kishore Chhabria have arrived at a settlement out of court on their open offers for Herbertsons.

Both Chhabria and Mallya will revise their offers to Rs 216.50 a share, and have agreed not to raise the price further.

Mallya made the announcement on the offer price late Tuesday night.

Mallya had last revised his bid to Rs 215 a share, in response to Rs 210.74 offered by Chhabria. Chhabria has over 49 per cent in Herbertsons, a large portion of which is disputed by Mallya, who holds 36 per cent.

The Securities & Exchange Board of India (Sebi) had ordered Chhabria to make an open offer to the minority shareholders of Herbertsons, for increasing his stake from 26 per cent to 49 per cent.

While Chhabria is the vice-chairman of Herbertsons, chairman Mallya controls the board and runs the company. Herbertsons' wholly owned subsidiary BDA Ltd is, however, controlled by Chhabria.

On request from both parties, the Supreme Court had directed that the last date for closing of the open offer as well as the counter-offer be extended to January 30.

The last date for revision of the offer price and the competitive bids and the number of shares is now January 15, 2004, and the last date for withdrawal of acceptance January 27.

Through the ongoing open offer, around 2.5 per cent of the shares have been tendered with the UB Group.

While Chhabria's offer is only for the mandatory 20 per cent, Mallya has made an offer for 45 per cent of the paid-up capital of Herbertsons.

The UB Group recently indicated that Mallya was willing to buy out Chhabria from Herbertsons after the offer closed.

Herbertsons is the largest spirits company in India, after the UB Group owned McDowell & Co and the late Manu Chhabria's Shaw Wallace.

Mending fences

---

• July 2002: Sebi orders Chhabria to make an open offer for Herbertsons
• October 2002: Chhabria makes open offer at Rs 90.50 a share plus interest; Mallya joins the fray with a counter offer at Rs 200 a share
• January 2003: After several rounds of price revisions, Chhabria's last offer at Rs 210.74 is outbid by Mallya at Rs 215 a share
• Both parties decide on January 13 not to raise their respective offer prices over Rs 216.50 a share
• Ongoing open offers close on January 30, 2004