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Promoters now hold over 40% in BSL

Calcutta, Sept. 4: Faced by a hostile takeover bid from Calcutta-based jute baron Ghanshyam Sarda, the promoters of BSL Ltd — the Churiwals and Jhunjhunwalas — are believed to have raised their stake in the textile major formerly known as Bhilwara Synthetics Ltd, to over 40 per cent.

Though the BSL management refuses to reveal the current shareholding of the promoters, the Sardas believe it is not less than 40 per cent.

This implies that the predators can topple the promoters’ only if their open offer for 30 per cent of BSL’s shares is fully subscribed. The Sardas hold close to 12 per cent in BSL now.

Another 6 per cent of the BSL’s shares is held by overseas investment companies that have confirmed their participation in the open offer.

The Sardas are now trying to woo the banks and insurance companies that have a combined holding of around 9 per cent in BSL.

The promoters of BSL are believed to have raised their stake by over 3 per cent through the creeping acquisition route in the last couple of months.

Their declared holding as of June 30 was a shade under 37 per cent.

When contacted, Ravi Jhunjhunwala, a promoter-director of BSL, said: “We will certainly defend the company from the Sardas, but will prefer not to reveal our strategy now.” He also refused to divulge the promoters’ current holding in the company.

The relatively illiquid BSL stock had shot up to Rs 80 recently on the back of brisk trading at the counter. The sharp gain forced the Sardas to say they were planning to better their offer. They have offered Rs 80 per share.

Ghanshyam Sarda said: “We may alter the conditions of our offer but will not play our cards till a week before the offer closes.” The offer will remain open for a month, starting September 30.

The Sardas believe their offer would sail through if the financial institutions agree to subscribe to it. “The 9 per cent held by the insurance companies and the banks is crucial. We can acquire the rest from individual shareholders,” Ghanshyam said.

The Sardas, however, have made acceptance of shares through the open offer conditional to full subscription. This implies they would buy nothing unless the offer is fully subscribed. Analysts read this as an admission of doubt by the Sardas about response to their offer.

The Sardas, however, are saying of late that the offer may not remain “conditional”. “We will seek the market regulator’s approval to drop the condition if our merchant bankers advise us to do so,” Ghanshyam Sarda said.

Meanwhile, disproving speculations BSL’s promoters refrained from making a counter-bid. The deadline for launching a counter- offer for the shares of BSL expired on Tuesday, 21 days from the announcement of the open offer by the Sardas.

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