The Securities and Exchange Board of India (SEBI) has directed the promoters of AP Paper Mills to include non-compete fees in their open offer, reports CNBC-TV18's Varinder Bansal. This means the case, which has already been hanging for the last three to four months, will get delayed further.
The open offer was made at a price of nearly Rs 544 per share and the non-compete fee of close to Rs 130 per share. SEBI has been saying that the shareholders are eligible to get this Rs 130 as well. It states that the final open offer price should total to around Rs 670 per share (Rs 544 plus Rs 130).
International Paper, the buyer of AP Paper, has approached the Securities Appellate Tribunal (SAT) against the SEBI order. And, if SAT too favours and gives a decision in line with SEBI, it's a bonanza for most of the company shareholders getting an additional Rs 130 per share.
A similar case, where Mudra Lifestyle made an open offer at Rs 60 per share, there was an additional non-compete fees for the promoters of around Rs 15 a share. In Mudra Lifestyle's case, SEBI said that the promoters have to include non-compete fees in the open offer, which made it up to Rs 75 a share. When the case was referred to SAT, it ruled in the company's favour and the shareholders then were not eligible to get Rs 15 when the final offer was announced.
Also watch the accompanying video for CNBC-TV18's Varinder Bansal's comments.
