TRIGGER LIMIT MAY GO UP TO 25%

100% open offer norm unlikely

Economic Times: 21/10/2010

Opposition Due To Advantage Of Overseas Buyers Over Indian Cos

Reena Zachariah MUMBAI THE Securities and Exchange Board of India,or Sebi, is set to unveil new rules on takeover of public listed firms based on the recommendations of a committee headed by C Achuthan,but may stop short of implementing a key proposal that envisages a mandatory open offer for 100% of the equity of a company by an acquirer.

The Sebi board,which is scheduled to meet on Monday,will discuss the overhaul of the takeover rules,notably an increase in the limit for triggering open offers to 25% from 15% and doing away with the concept of a non-compete fee to promoters.However,considering the resistance from industry bodies or lobbying arms of corporates,merchant bankers,corporate lawyers and fund managers,the capital market regulator may have to take a hard look at the proposal that makes it obligatory on all acquirers to buy out 100% of the equity of a target company,according to a senior official in Sebi.

This official said the bulk of the comments that it has received from industry as well as capital market intermediaries,including merchant bankers,related to this proposal.The opposition to this proposal stems from the fact that overseas acquirers have an advantage over their Indian counterparts.Indian corporates cannot access bank funds for buying out a company as RBI does not permit banks to fund such an activity.In contrast,many foreign companies do not face such restrictions and that makes it easier for them to make an aggressive bid for controlling local firms.

The 25% threshold for triggering a tender offer moves us closer to norms in other countries.Requiring the tender offer to be for all 100% appears fair to minority shareholders,but then building in a squeezeout provision would make it fair for acquirers, said Anantharaman,MD & head-corporate advisory & finance,Standard Chartered.

Milestones of Tata Group

The Tata group is one of India's oldest, largest and most respected business conglomerates. The group's businesses are spread over seven business sectors.

Nirma board decides to de-list company

Sun, Oct 10 2010. 4:17 PM IST

With $1 billion revenue, today Nirma is the seventh largest soda-ash maker in the world.

Ahmedabad: The board of directors of Nirma Ltd Sunday approved the proposal made by chairman Karsanbhai Patel and other promoters for acquiring 3.63 cr equity shares of the company, being all the equity shares not held by promoters in the company and seek delisting of equity shares from the Stock Exchanges pursuant to and in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations), 2009, the company said in a corporate announcement.

Presently, Nirma’s equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Incorporated in 1984, Nirma Limited paved way for consolidation of operations leading to listing of the company in 1994. The company’s main line of business is soaps and surfactants. The company recently diversified to pharma and processed minerals and cement businesses.

Total income and gross fixed assets of the company, on consolidated basis, for the financial year ended on 31 March 2010 is Rs4696 crore and Rs5032 crore, respectively. Share capital and reserves of the company as on 31 March 2010, on consolidated basis, is Rs79.57 crore and Rs2746 crore respectively. As on date promoters hold 77.17% of the paid up equity share capital of the company.

“The acquirers believe that it is this changing nature of the business of the company that has led to market valuations of the company to be valued as diversified conglomerate, rather than as a consumer products company or at a valuation that reflects the sum of its parts. The acquirers believe that given the low trading liquidity in the stock, the delisting offer should provide investors with an opportunity to get an exit at a fair value, while according the company the flexibility to carry on its operations,” the company said in a press statement.

The acquirers are of the view that a price of Rs235 per share is an attractive price for the public shareholders of the company under the present circumstances. The price represents a premium of approximately 19% to the price determined as the average of the weekly high and low of the closing prices of the equity shares of the company as quoted on NSE, during the 26 weeks preceding the date of the decision, the company said. The share price of Nirma Ltd stood at Rs224.45 when the markets closed on Friday.

The success story of Karsanbhai who started manufacturing phosphate-free detergent powder in his backyard and sold it while cycling to work has already become business folklore.

With $1 billion revenue, today Nirma is the seventh largest soda-ash maker in the world.

In 2004, the Nirma group expanded into pharmaceuticals by acquiring an IV fluid factory in Ahmedabad. It also acquired US-based Searles Valley Minerals to become one of the top producers of soda ash in the world.

Today, nine manufacturing locations of the company serve four continents globally and 37% of total income is generated overseas.

Fortis Healthcare to buy HongKong business

Fortis Healthcare have agreed to buy the healthcare assets of Hong Kong-based Quality HealthCare Asia for $195 million.

Reuters
Sun, Oct 10 2010. 10:41 PM IST

Mumbai: The controlling shareholders of Indian hospital chain Fortis Healthcare have agreed to buy the healthcare assets of Hong Kong-based Quality HealthCare Asia Ltd for HK$1.52 billion ($195 million), according to statements issued late on Sunday.

New Delhi-based Fortis Healthcare, controlled by billionaire brothers Malvinder and Shivinder Singh, fell short in its bid earlier this year to take control of Singapore-based hospital chain Parkway Holdings as part of an effort to build an international business.

The Quality HealthCare acquisition is being made by the Singhs’ Fortis Global Healthcare Holdings Pte Ltd unit, which it said is the family’s vehicle to build a pan-Asian healthcare business.

In addition to the HK$1.52 billion in cash, Fortis Global Healthcare will provide HK$20 million in base working capital, Quality HealthCare said in a statement.

India pulls top Japanese drug makers

Business-Standard, Mumbai October 4, 2010

Top Japanese drug makers are planning big presence and investments in India, within two years of India’s largest manufacturer, Ranbaxy Laboratories, being taken over by Daiichi Sankyo, the third largest Japanese one.

Mitsui has had a business relationship with Arch for the past four years. The strategic stake sale will help the Rs 1,200-crore Arch to foray into supply of active ingredients and intermediates in the tough Japanese market, as Mitsui will exclusively market Arch’s products in Japan, said Ajit Kamat, chairman and managing director.

“Mitsui has formulation manufacturing units in Japan and contract and clinical research facilities in Singapore. It is natural for them to enter into a strategic alliance in India to access the active ingredient link, which was missing in their pharma supply chain,” he said.

This is the first acquisition by a Japanese company in the Indian drug market since the June 2008 acquisition of Ranbaxy by Daiichi Sankyo. The recent deal is likely to trigger more Indo-Japanese drug sector deals, said Kamat.

Japanese companies such as Takeda, Astellas, Eisai, Taiho Pharmaceutical, Mitsubishi Pharma, Dainippon Sumitomo, Kyowa Hakko and Shionogi are among the top 50 drug companies in the world. The first three are among the world’s top 25 drug companies. Most of these majors were so far concentrating only on the Japanese market, with their patented drugs.

India’s attraction
According to a report by consultancy company PricewaterhouseCoopers (PwC), India is estimated to become one of the top 10 drug markets and will be worth $50 billion in the next 10 years. The country is currently at 14th position in the list of the world’s largest markets, with annual sales of $19 billion.

Takeda, Japan’s largest drug maker, with a history of 230 years and a turnover of ¥1,466 billion (Rs 78,700 crore), is likely to be the next major Japanese drug company to tap the Indian market. “We are considering expanding our business to India,” Oguri Mitso, spokesperson, told Business Standard in an e-mail.

He declined to reveal details. A week earlier, market sources speculated Takeda was in discussions to acquire the formulation business of Dr Reddy’s Laboratories. “Our plans are not related to Dr Reddy’s Labs,” clarified Mitso. A Dr Reddy’s spokesperson also ruled out sale of the domestic formulation business.

Astellas Pharma, the second largest Japanese drug maker, has started testing the Indian waters by launching a liver-kidney-heart transplantation drug in India. Astellas, which is not looking at generics business globally, will launch more products from its parent stable in the coming years, said Himanshu Dave, director, sales and marketing, of Astella’s Indian unit.

“We cannot give a time frame as of now, but we are evaluating the big opportunities in India,” he said. Similarly, Dainippon Sumitomo Pharma, another Japanese drug maker has started an Indian office and will soon launch its operations, said industry executives.

Eisai and Co, another leading Japanese drug leader, is making India a major manufacturing hub for its global operations and is setting up a huge facility at Visakhapatnam, Andhra Pradesh, with an investment of close to Rs 1,900 crore. The facility is ready and is awaiting some regulatory approvals to start production, said industry sources.

These companies will first be confined to small operations to get a feel of the local market. Then, in a year or two, will go for large-scale investments including big-ticket acquisitions, said an industry observer.

Example of Vertical Merger: Backward Integration

Mon, Oct 4 2010. 9:10 PM IST
livemint.com

Tata Motors acquires Italian design house

Both Tata Motors and Trilix Srl have worked together on several projects in the past

New Delhi: Tata Motors Ltd said on Monday that it had acquired an 80% stake in Trilix Srl, an Italian design and engineering firm for €1.85 million (Rs. 11.29 crore). The acquisition is in line with the company’s objective to enhance its styling and design capabilities to global standards, Tata Motors said in a statement. Milan-based LMS Studio Legale acted as legal advisors for the transaction.

Both companies have worked together in the past on several projects. Trilix has developed a strong understanding of the Tata brand and excellent working relationships with the company in several projects over the years, the statement added.

The remaining stake in Trilix is held by its promoters Federico Muzio and Justyn Norek.

With a turnover of €4 million and net profit of €2,50,000, the company offers design and engineering services in the automotive sector.

According to analysts, the acquisition is not a very significant one in terms of the deal size, but it will help Tata Motors enhance its design capabilities. However, since the company is looking forward to some new launches and re-launches, it may be in a positive direction, said Vaishali Jajoo, an analyst with Angel Broking Ltd.

Vijay Mallya in talks to buy majority stake in QPR

05 October 2010 à 13:38

Vijay Mallya is reportedly in talks to buy the London football team Queens Park Rangers.

The club is currently owned by F1 chief executive Bernie Ecclestone and banned former Renault team boss Flavio Briatore.

The Evening Standard newspaper said Mallya, the Indian billionaire and owner and boss of the F1 team Force India, is eying a ‘significant’ stake in QPR, who are currently top of the second division.