The Sardas have formalised their arrangement with the UAE-based investor Kailash Agarwal to gain management control of BSL Ltd , formerly Bhilwara Synthetics.
Kolmak Chemicals, the company through which the Sardas are spearheading the takeover battle against the Jhunjhunwala-Churiwal management, signed a memorandum of understanding (MoU) with the non-reisdent Indian-owned Resemble Fiscal Pvt Ltd last night to mount the takeover bid jointly.
According to the MoU, both the parties will equally share financial responsibility to acquire a majority stake in BSL. Management control will be equally shared as well, if the takeover bid suceeds.
In addition, Agarwal, a businessman with intersts in shipping, textiles, real estate and financing, would provide expertise in expanding BSL's business in west Asia, once management control at BSL passed into the hands of the combine.
Ghanshyam Sarda of Kolmak Chemicals confirmed the development. In line with the agreement between the two parties, Kolmak and its associates holding a combined stake of 11.86 per cent will transfer nominal shareholding to Resemble Fiscal. Agarwal now has a close to one per cent stake in BSL.
The future course of action includes launching an open offer of 50 per cent to the BSL shareholders, including the promoters, the Churiwal-Jhunjhunwala combine. The promoters hold over a 34 per cent stake.
Sources close to the development said the Sarda-Agarwal combine was at an advanced stage of negotiations with a leading merchant banker in Mumbai to finalise the finer points of the proposed open offer. However, Sarda was non-commital on the timing and pricing of the issue.
Lyons Range sources said the Sarda-Agarwal combine was going slow on the offer as they were concentrating on plugging all the loopholes in the offer.
A minute's lapse in the offer will encourage BSL's existing promoters to drag the issue to the Securities and Exchange Board of India (Sebi) as well as refer it to the courts of law. This will stall the offer eventually and make the task difficult for the raider, if not impossible.
They predict that the pricing will be in the range of Rs 70-75, well above the stock's last six months' average price of Rs 31. The Sebi takeover norms prohibit the pricing of an open offer below the six months'average.
