Sterlite Industries has agreed to raise its open offer for acquiring a stake in Indian Aluminium following a directive from the Securities and Exchange Board of India yesterday. Sterlite will now make an offer to acquire 20 per cent of the paid-up equity capital of Indal, while retaining the clause relating to minimum acceptance level of 10 per cent.
The Sebi brass, Sterlite chief financial officer Tarun Jain and merchant bankers Vallabh Bhansali of Enam Financial (appearing for Sterlite) and Shitin Desai of DSP Merrill Lynch (representing Indal) thrashed out the essence of the offer and its legality through discussions that spanned three hours yesterday.
The role of S M Datta, Indals non-executive chairman, has also gained significance, with Datta being briefed by Indal managing director Tapan Mitra yesterday.
The mood at the Indal headquarters in Calcutta was positive after Datta was roped in to tackle the issue. According to Indal sources, Datta agreed with the steps being taken by Indal, including the appointment of DSP Merrill Lynch as advisor.
Speaking to Business Standard last evening, Mitra said, Sebi is a quasi-judicial body and has decided to administer its own regulations.
Indal is upbeat over the support extended to it by its principal shareholder, Canada-based Alcan, which holds 34.6 per cent in the company. Alcan has made it clear that it has nothing to do with Sterlite and does not want it as a partner in Indal.
The Sebi move yesterday ensures that while on one hand Sterlite would make an offer to acquire 20 per cent, it would be under no obligation to accept any shares if the response is less than 10 per cent. On the other hand, if the response is more than 10 per cent, Sterlite would be bound to accept whatever has been tendered in.
An order was issued to the merchant banker Enam Financial by the Sebi chairman yesterday.
Sebi chairman D R Mehta said the move ensures that the interest of the minority shareholders is taken care of and that that more shareholders benefit through this offer, he said.
This amendment is in the larger interest of investors so that they get an opportunity to participate in the offer and also reaffirm the principle of minimum offer of 20 per cent, which is central to the takeover regulations, Sebi officials said.
Bhansali, when contacted said, we looked at Sebis directive closely and understand that the matter must be looked at not just in letter terms, but also in spirit. He hinted that there was a need to standardise the interpretation of the Sebi takeover code.
Mehta added that under Section 5 of the takeover code, Sebi has powers to call the merchant banker to clarify its interpretation of the code. We told the merchant banker that the interpretation of the code was not satisfactory, and that changes have to be made in the public announcement, he added.
One of the issues on which the Sebi brass was concerned was the impact it would have on future acquisitions of this sort.
