Harshad's ACC shares go to LIC for Rs 275 crore

The Life Insurance Corporation (LIC) has picked up the late Harshad Mehta's 11 per cent holding in Associated Cement Company (ACC), for a total consideration of Rs 275 crore.

LIC, which emerged as the sole bidder for the 16.3 million shares put up for auction by the custodian, has paid Rs 170 per share for the stake.

This works out to a 19.41 per cent discount to the current market price of the ACC scrip. With this, LIC's holding in ACC is expected to climb to 26 per cent. On June 30, LIC held a 16.17 per cent stake in ACC.

"Though the guidelines do not permit insurance companies to hold more than 20 per cent in any company, it has relaxed the guidelines in some cases," LIC officials said.

The special court judge, A K Deshmukh, on Friday passed the order awarding the controlling block of ACC shares. However, LIC was forced to revise its original offer from Rs 163 per share to Rs 170. N H Shervai appeared on behalf of LIC and Gaurang Doshi appeared on behalf of the custodian.

The custodian had invited bids for the ACC shares on September 22 and bidding was open till October 8. Though several foreign cement majors were expected to be interested in the "controlling stake", finally LIC emerged as the sole bidder for the shares.

The ACC management, which was given the right to buy the holdings, was also present in court. The Special Court had earlier said after ascertaining the highest offer, it might give an opportunity to the ACC management to buy the "controlling block" of shares if they so desired.

"If LIC is buying the controlling block and the offer price is revised to Rs 170 per share, we have no objections to the stake sale," said Ghulam Vahanvati, representing the ACC group.

On the Bombay Stock Exchange (BSE), the ACC scrip which had opened at Rs 206.25, touched a high of Rs 210.80, before closing 1.48 per cent lower at Rs 203.20, with traded volumes of more than 1.852 million shares on the BSE and 2.712 million shares traded on the National Stock Exchange.

Brother may move court

Ashwin Mehta, brother of late Harshad Mehta, plans to appeal in the Supreme Court against the special court's orders. "We are considering moving the Supreme Court as we find the bid price at a huge discount to the current market price," he said. The special court had rejected Ashwin Mehta's argument that these ACC shares be sold in small lots.