The Telegraph
Since 1st March, 1999
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Hopes soar for ACC investors

Mumbai, Nov. 28: The Securities and Appellate Tribunalís (SAT) ruling on the Grasim open offer for Larsen & Toubro is set to turn the spotlight on the deal that started it alló involving Gujarat Ambuja Cements Ltd (GACL) and Associated Cement Companies (ACC).

Corporate and market observers say the issue of whether GACL gained management control in ACC after it acquired 14.45 per cent of the latterís equity from the Tatas is likely to come up for greater scrutiny by the Securities and Exchange Board of India (Sebi).

Speculations are rife that Sebiís review may result in the company being asked to come out with an open offer for ACC shareholders at a price at which it acquired the 14.45 per cent from the Tatas.

Analysts also do not rule out the other possibility of Sebi sticking to its earlier view that GACL should not come with an open offer at all.

The Ambuja group has so far been maintaining that its acquisition of the ACC stake is only a strategic investment and that it does not have influence over management decisions made by the latter.

Last month, SAT directed the market watchdog to examine whether the Gujarat Ambuja group had gained management control over ACC after acquiring 14.45 per cent of the companyís shares from the Tatas. Sebi had earlier held that an open offer was not triggered under the takeover code when the group acquired the entire 14.4 per cent held by the Tatas in ACC.

ďApart from the Grasim-Larsen and Toubro issue, the stake held by Gujarat Ambuja in ACC would now come into significance as Sebi is carrying out investigations on both these fronts,Ē a market observer pointed out. He added that the coming days could see increased activity in the ACC stock on hopes of an open offer from GACL with financial institutions enhancing their holdings in the cement giant.

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