 "Standard Greases makes open offer for Tide Water")
Standard Greases & Specialities, one of the largest private label grease manufacturers in the country, has launched an open offer for Tide Water Oil Company (India), promoted by public sector company Andrew Yule.
According to a stock exchange filing, Standard Greases & Specialities made an offer to acquire 226,512 shares translating to 26 per cent of Tide Water Oil's equity. The offer price is Rs 16,632 a share, which totals to around Rs 376 crore. The Tide Water stock, however, closed at Rs 17,046 on the BSE on Tuesday, up 1.66 per cent from the previous close.
At this closing price, the company had a market cap of Rs 1,485 crore.
Standard Greases is launching the offer together with Janus Consolidated Finance, Alpha TC Holdings Pte and Tata Capital Growth Fund as persons acting in concert.
Standard Greases and Janus collectively hold 24.935 per cent of Tide Water Oil's voting share capital, the filing said. "While there is no underlying transaction, the offer is being made under Regulation 3(1) and Regulation 4 of the Sebi (SAST) Regulations pursuant to the decision of the acquirer to increase its shareholding in the target company, by making this open offer for 26 per cent of the voting share capital and to classify the acquirer as a promoter of the target company in accordance with the provisions of Regulation 31A(8) of the Sebi (LODR) Regulations."
SBI Capital Markets is the manager for the offer.
"We are not aware of this offer. But we are in a comfortable position," said Kallol Datta, chairman, Tide Water Oil.
According to the shareholding pattern filed with stock exchanges as of June 2015, Andrew Yule holds 26.22 per cent in Tide Water Oil. The Life Insurance Corporation has a 4.22 per cent stake in the company, while United India Insurance Company has 6.88 per cent, and Tide Water Oil Employee Welfare Trust 2.46 per cent.
Datta's confidence is backed by the support from these entities. Eighty-eight per cent of Andrew Yule is held by the government of India.
Vinod Vyas, joint managing director and founder, Standard Greases, clarified the company was consolidating its holding as its holding was at 24.93 per cent, close to the Securities and Exchange Board of India's threshold limit of 25 per cent, which would have triggered an open offer.
Incidentally, Standard Greases is a supplier to Tide Water Oil, which manufactures and markets Veedol brand of lubricants. A couple of years ago, Standard Greases had approached Tide Water for increasing collaboration, but there was no formal proposal from the company. Though the open offer might have come as a surprise, Standard Greases has been buying into the Andrew Yule group company since 2008.
The offer has come at a time when Tide Water is expanding its business outside India. It has re-launched the Veedol brand in South American markets.
