Financial Daily from THE HINDU group of publications
Sunday, Jul 13, 2003
Financial Daily from THE HINDU group of publications Sunday, Jul 13, 2003 |
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Investment World
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Open Offers Markets - Open Offers Schenectady Beck: Accept S. Muralidhar
The acquirer, Altana Electrical Insulation GmbH (Altana Electric), is proposing to purchase up to 13,70,985 shares of SBIL, representing 17.29 per cent of the latter's capital at Rs 75.27 per share. Post-open offer, the share is most likely to be delisted from the Bombay and Pune stock exchanges, where it is currently traded. Altana Electric, a company based in Germany and part of the Altana group, which has holdings and business activities worldwide, had, along with group and affiliate companies — Altana AG, Altana Chemie, Altana Electric, Deatech Siva S.R.L. — and The P.D. George Company, signed a stock and asset purchase agreement to acquire the worldwide electrical insulation products business of Schenectady International Inc., Schenectady Canada Ltd., Schenectady Germany Holdings GmbH, Schenectady India Holdings Ltd., Schenectady Europe SAS and Schenectady Europe Ltd. Pursuant to the agreement which was signed in April this year, Altana Electric will acquire 82.71 per cent of the share capital (65,56,697 shares) of Schenectady-Beck India Ltd (SBIL). The current open offer was necessitated in view of this agreement and the acquirer is attempting to acquire the remaining 17.29 per cent of the voting share capital of SBIL. In terms of the agreement, the purchase price for the 82.71 per cent of SBIL shares is $10.41 million (Rs 4,935.38 lakh). The agreement also provides for a purchase price adjustment to account for the earnings between the period January 1, 2003 and the finalisation of the agreement.According to the purchase price adjustment, the purchase price shall be adjusted to account for the earnings of SBIL for the above-stated period based on a formula specified in the agreement. The acquirer is undertaking that in case, due to the purchase price adjustment, any sum is paid to the sellers (Schenectady India Holdings), a similar payment will be made to all the shareholders whose shares are accepted in this offer. Also under the agreement, SBIL will sell two immoveable properties in Mumbai and its phenolic resins business assets and liabilities to an affiliate of the sellers, subject to shareholder approval. The proceeds of this sale, net of taxes, is also expected to be paid as dividend to all shareholders of SBIL, including those that tender the shares under the open offer. Besides SBIL, Schenectady India Holdings Ltd also holds 82.09 per cent of the share capital in another listed company, Schenectady Herdillia Ltd (SHL). The agreement is not for the purchase of shares in SHL and the shareholding of this company will not be disturbed. The number of shareholders of SBIL, as on May 10, is 6,933, with negligible levels of institutional holding in the company. In the light of the strong possibility of the stock being delisted and its poor liquidity, shareholders may exit the stock by accepting the open offer.
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