Jyothy Laboratories today said it will start the mandatory open offer by next week for 20% in Henkel India following its acquisition of majority stake yesterday.
The company, which plans not only to re-position Henkel brands but also bring in new products from the German firm's global portfolio into India, said it will merge the acquired company with itself in due course of time.
"The open offer for the mandatory 20% stake in Henkel India will begin from next week... We will be informing the stock exchanges on Monday," Jyothy Laboratories Deputy Managing Director Ullas Kamath told reporters.
The open offer would be managed by MAPE Advisory Group.
On Thursday, Jyothy Laboratories (JLL) that makes of the 'Ujala' fabric wash said it would acquire 50.97% stake in Henkel India (HIL) from Germany-based Henkel AG & Co for Rs 118.7 crore.
Last month, JLL had bought 14.9% stake in HIL from the Indian promoter Tamil Nadu Petroproducts for about Rs 60 crore.
If the 20% open offer is fully subscribed, JLL will own 85.87% in Henkel India.
"The acquisition value of total stake in HIL is being estimated at about Rs 774 crore," he said.
When asked about the future of Henkel India, if it would be de-listed from the stock exchanges, Kamath said: "It will be merged with JLL."
According to JLL General Manager Finance Neetu Kashiramka completion of the open offer will take another three months, post which the company will make an application in a court for merging HIL with JLL.
"The entire process is likely to take anywhere between six and nine months and even after the merger HIL will continue to be listed," she said.
To finance the acquisition, JLL had raised debt of Rs 600 crore, which it is now looking to bring it down to Rs 200 crore to Rs 300 crore within the next two-three months.
"We are trying to see various options to bring down the debt to Rs 200-300 crore in our balance sheet," Kamath said.
As part of the acquisition, JLL would also refinance HIL's existing Rs 454 crore debt of HIL and also buy out redeemable cumulative preference shares in HIL held by Henkel AG for about Rs 43.9 crore subject to regulatory approval.
