TVS Motor Company Ltd has announced an open offer to acquire 50.3 per cent of the stake (65.69 lakh shares of Rs 10 each) of Harita Finance Ltd at an offer price of Rs 10 per equity share. The company informed the Bombay Stock Exchange (BSE) that the open offer would open on April 29 and close on May 28, 2002.
According to market watchers, TVS Motor may convert Harita Finance into its wholly owned subsidiary and make it an arm offering direct finance for motor vehicles. The company, to leverage its brand, may also decide to change the name of Harita Finance to associate directly with TVS Motor, so that it can raise funds at a lower rate.
Harita shares witnessed a sharp increase in value to close at Rs 7.8 from yesterday's close of Rs 6.5 on the BSE following the announcement, a 20 per cent rise in a single day's trade. The offer price represents a premium of 28.05 per cent over the closing price of Harita Finance on the BSE.
According to latest shareholding data filed by Harita Finance with the BSE, the Indian promoters and persons acting in concert hold 49.5 per cent and 0.07 per cent stake in the company as on December 2001. The remaining stake is held mainly by the public (49.14 per cent), followed by private corporate bodies with 0.97 shares.
TVS Motor said it does not hold any shares in Harita Finance, and added that it was TVS Investments Ltd, Lakshmi Auto Components Ltd and Anusha Investments Ltd (categorised as persons acting in concert) that held 49.7 per cent stake in the company.
TVS Investments Ltd, Lakshmi Auto Components Ltd and Anusha Investments Ltd were all part of Sundaram Clayton Ltd, the promoter of TVS Motor Company.
It may be noted that the shareholding pattern in Harita Finance has witnessed substantive changes in the last nine months alone. As on April 2001, private corporate bodies held around 50.36 per cent stake and Indian promoters had no stake. The situation reversed within nine months. As on December 2001, the Indian promoters' stake has risen to 49.57 per cent and correspondingly, the share of private corporate bodies had dropped to just 0.97 per cent.
