Egyptian company spooks Tata Chem

EK Holdings revises bid to $462; 30% higher than what Tata Chem had to offer.

The Tata group's plan for the biggest overseas buy by an Indian company has run into rough weather with Egypt Kuwait Holding (EK Holding), a financial services firm, offering $110 a share more than what Tata Chemicals' had bid for Egyptian Fertiliser Company (EFC).

Although Homefield International Ltd (HFL), a Tata Chemicals' subsidiary which had bid for EFC, was not forthcoming on its future move, a release from the company said: "The bid price is about 30 per cent higher than our offer and we feel that at this level, value creation becomes a difficult proposition."

The Tata Chemical stock lost 1.13 per cent on Bombay Stock Exchange today to close at Rs 171. At a total value of $601.06 million, the EK Holding offer is now $81.86 million higher than the $519.2 million (over Rs 2,250 crore at an exchange rate of Rs 43.50 per dollar) offer made by Tata Chemicals.

In a notice to the Cairo Stock Exchange, EK Holding has revised its offer to $462 per share for acquiring 1.301million shares or 88.25 per cent of EFC.

EK Holding already has 11.75 per cent stake in EFC.

Tata Chemicals had initially made an open offer to buy EFC at $305 per share. At that price, the total cost of acquisition worked out to $450 million. After EK Holding made a counter bid at $350 per share, Tata Chemicals had increased its price to $352 per share.

EFC was put up for sale through the government's disinvestment policy. The public shareholding of the company stands at 46 per cent and the combined shareholding of banks, government and institutions is 54 per cent.

A failed move?
23 May: Tata Chemicals makes open offer at $305 per share for 1.475 million EFC shares amounting to $450 million.

30 May: EK Holding makes counter bid at $350 per share for 1.301 million EFC shares amounting to $510 million

5 June: Tata Chemicals revises bid to $352 per share or $519.2 million

16 June: EK Holdings revises bid to $462 per share or $ 601.06 million