Mumbai, March 6: Tata Sons will buy over 11 per cent of Tata Honeywell’s shares from Tata Industries at current prices in a stake shuffle between group companies of the country’s second-largest business house.
Over 9 lakh shares of the company, a joint venture between the Tata group and the US’ Honeywell, will change hands. Tata group firms and Honeywell Asia Pacific Inc hold 40.62 per cent each; the public has 18.76 per cent.
In its application filed with the Securities and Exchange Board of India (Sebi), Tata Sons says 11.02 per cent (or 9.74 lakh shares) of the 40.62 per cent controlled by Indian promoters remains with Tata Industries.
Tata Sons, the holding company of the Tata group, has made clear its intention to acquire Tata Industries’ stake in Tata Honeywell, in one or more tranches, at the ruling market price on a spot delivery basis.
Its application before the market regulator seeks exemption from making an open offer. Under the current norms, a stake deal that exceeds the 5 per cent creeping acquisition limit obliges the purchaser to make an open offer to shareholders of the target company.
Tata Sons insists the stake rejig is part of a shake-up in the group’s investment basket. Since it is a promoter of Tata Industries and share purchases are in the nature of inter se transfer among promoters, the company says there will be no change of control at Tata Honeywell; there will be no effect on public holding either.
The capital market regulator has already granted Tata Sons immunity from complying with provisions of Chapter III of the takeover code (making an open offer).