The Burman family, promoters of Dabur India Ltd, on February 28 informed stock exchanges that it made an open offer for an additional 26 percent stake in Eveready Industries Ltd, which is now controlled by Khaitan Group.
The mandatory open offer under the takeover regulations was made as the Burmans acquired an additional 5.26 percent share of Eveready for Rs 122.30 crore, taking their total shareholding to 25.11 percent. The Burman family is the single-largest investor in Eveready.
According to SEBI regulations, the acquiring company has to make an open offer if its stake crosses 25 percent. If such an open offer is triggered, then the acquiring firm will need to offer to buy at least 26 percent additional stake from public shareholders, almost at the prevailing market price.
Post this 5.26 percent stake acquisition, the Burmans will make an open offer to buy additional 18.90 million shares or 26 percent stake in Eveready for Rs 604.76 crore. The group will buy the stake at a price of Rs 320 a share.
The companies on behalf of which Eveready acquisitions will be made are Puran Associates Pvt Ltd, VIC Enterprises Pvt Ltd, MB Finmart Pvt Ltd, Gyan Enterprises Pvt Ltd and Chowdry Associates, all owned by various members of the Burman Family. JM Financial Ltd has been appointed as lead manager to the offer.
As of the December quarter, Puran Associates Pvt Ltd holds a 5.24 percent stake, VIC Enterprises Pvt Ltd has 4.95 percent, MB Finmart Pvt Ltd holds 6.2 percent, Gyan Enterprises Pvt Ltd 1.95 percent, Gladiator Vyapaar Pvt Ltd 3.11 percent and Chowdry Associates owns 1.51 percent in Eveready Industries.
The shareholding of the Khaitan family in Eveready plunged to 4.84 percent from 44.1 percent over the past two years as lenders sold shares pledged with them after the promoter group defaulted on payments. The promoters pledged their holdings in Eveready and its unit company McLeod Russel India to obtain loans and repay the debt of another unit, McNally Bharat Engineering.
Eveready was struggling with high debt for the last few years and has been trying to monetise some of its assets. Recently the battery maker has also hived off its loss-making tea operations and sold its surplus land in Chennai and Hyderabad to reduce debt.
