Holcim, has taken an aggressive approach to push through its open offer to the shareholders of the Associated Cements Ltd (ACC). DSP Merrill Lynch, merchant banker to the offer, has appointed agencies to touch base with minority shareholders in all major cities before the offer closes on Monday. A source in DSP Merrill Lynch confirmed that representatives of a few agencies are meeting minority shareholders “to check whether they got forms of the offer.”
However, a minority shareholder of ACC, who met such a representative, said, “ The representative tried to convince me why I should tender my shares to the offer,” Roshni Jayakar, an ACC shareholder, said.
Analysts said the move of touching base with shareholders showed the seriousness of the Swiss cement maker to scale up its holding in ACC to 50.01 per cent. The open offer follows acquisition of a two-third stake by Holcim in Ambuja Cement India, an investment company that holds a 13.84 per cent stake in ACC.
Holcim has also planned to invest US$1.2bn to consolidate its footprint in the Indian. An application seeking the government’s permission to this effect has been filed. Experts said the success of the issue hinges on the financial institutions, which have a combined holding of 18.63 per cent. Of this, LIC holds 15.72 per cent, New India Assurance 1.73 per cent and Oriental Insurance controls an 1.18 per cent. Foreign institutional investors hold a 11.54 per cent stake. A source close to the offer said the issue is priced at 20 times of the price-earnings (P-E) ratio of the company. He explained :”Sensex at 6500 points is pegged at 16 times of P-E,” he added to draw a comparison (abstracted report from business Standard India).