Heidelberg open offer falls through

Heidelberg open offer falls through
Published: 02 March 2007

The open offer made by the German cement major HeidelbergCement to the shareholders of Mysore Cements Ltd has fallen through.

The company, which made an open offer to acquire a little over 22% stake, could able to muster only 4.33% for its offer price of Rs 58 a share. Despite its revised public announcements and repeated corrigendum to the open offer, the German major failed to evince necessary response from the individual shareholders, who preferred to sell at much more better price than the open offer price of Rs 58 as cement is witnessing a boom period currently, said sources.

Cementrum IBV, which made a revised public announcement of an open offer to acquire 3,50,00,000 equity shares of Rs 58 a share (works out to be around 22.15%) through its issue manager Ambit Corporate Finance Pvt Ltd, could able to acquire only 68,37,453 equity shares (around 4.33%) only, said sources. 
The company, which was expected to increase its stake to 72.72% through the open offer, could end up with a post-offer stake of 54.89% only, it added. It may be recalled that the German major has moved the Securities Appellate Tribunal earlier challenging Sebi’s direction to enhance the price offered by Rs 14.50 per share (as paid to the original promoters as non-compete fees under share sale and share purchase agreement entered into on July 18, 2006). SAT in its interim order permitted the German major to go ahead with its open offer at the same price fixed earlier.

Heidelberg, through its person acting in concert - Cementrum, has acquired 6,65,00,000 equity shares of Rs 10 at a price of Rs 54 (including a premium of Rs 44) on a preferential basis from Mysore Cements in July 2006. The company has also acquired another 1,34,00,000 equity shares from the promoters at a price of Rs 58 a share. The company has invested over Rs 436 crore (nearly $100 million) for the total stake of 51%.