Calcutta, Dec. 5: The Sarda group’s hostile bid for management control of BSL Ltd is falling through, despite “a reasonably good response” from individual shareholders.
The Sardas had made a ‘conditional’ public offer for a 30 per cent equity stake in BSL, which said the shares tendered would be bought only if the offer was fully subscribed. The offer, which closes tomorrow, will not be fully subscribed, and in keeping with the conditions, the Sardas will not buy any share tendered in the open offer.
Before making the open offer, the Sardas had bought nearly 12 per cent of BSL’s shares from the market. “They will miss the mark marginally, but are unlikely to give up. They have tested the waters and may come back with a fresh offer,” sources close to the Sardas said.
The promoters of BSL—the Churiwal-Jhunjhunwala combine—had moved the Securities and Exchange Board of India (Sebi) pointing out a number of irregularities in the offer and challenging its validity. The BSL management had alleged that the Sardas did not send a copy of the offer document to the company in proper time, and that the promoters had been deprived of the opportunity to consider a counter-bid.
The company said the offer should be cancelled and the acquirers asked to make a fresh bid after the mandatory ‘cooling period’ of six months. However, Sebi refused to spike the bid and asked the Sardas to revise the offer. After examining the revised bid, the market regulator issued a fresh schedule.
Aggrieved by the regulator’s decision to allow the Sardas to go ahead with the revised offer without having to wait for six months, the company moved the Jodhpur bench of the Rajasthan High Court. The final hearing of the writ is slated for December 12.
Observers say the row between the promoters and the Sardas confused individual investors and financial institutions. Banks and insurance companies, along with a few overseas corporate bodies held close to 15 per cent of BSL’s shares. It is not yet clear whether the institutions responded to the offer.