The Telegraph
Since 1st March, 1999
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Plot thickens, Kishore now one up on Mallya

Mumbai, Sept. 12: The race for the control of Herbertsons is heading for a photo-finish. Accepting UB Group chief Vijay Mallya’s challenge, Kishore Chhabria today jacked up his open offer price to Rs 210 per share from Rs 90.50. The new offer price includes the interest component to share holders irrespective of their holding period.

The new Chhabria offer comes two days after two Mallya companies, McDowell and Company and Phipson, announced a counter-bid for 46 per cent in Herbertsons at Rs 200 per share.

“We have decided not to create divisions between the shareholders. What we are doing is to offer the same price to any shareholder who wishes to accept our offer,” sources close to the Chhabrias said.

In the previous offer, the Chhabria camp reserved the 15 per cent interest component only for shareholders who were in the roster from January 1995.

Analysts say the latest move will force Mallya to come out with a better offer in double quick time, and at a price that will make the Chhabrias and other shareholders bite the bait.

Legal experts see the Chhabria move as more of a defensive strategy. They (the Chhabrias) apprehend that the Securities and Exchange Board of India might spike their offer as it creates different classes of shareholders. This is because shareholders who have recently picked up a stake in Herbertsons were being offered only Rs 90.50.

The rival offers for an additional stake in Herbertsons is lying with the capital market regulator. According to an analyst, it would have been a catastrophe for the Chhabrias if their offer got spiked just because the price varied for different sets of shareholders.

Chhabria’s open offer is being managed by Lazard, while McDowell and Phipson’s offer is being steered by Kotak Mahindra Capital Company.

Kishore had recently got a shot in the arm from the Securities Appellate Tribunal which directed Manu Chhabria’s younger brother to make an open offer for Herbertsons shares.

Following the Securities Appellate Tribunal (SAT) directive, Kishore R Chhabria, Madanlal D Chhabria and associates had made an open offer to shareholders of Herbertsons to acquire an additional 20 per cent stake at Rs 90.50 per share plus interest to shareholders who held the share from January 1995.

The offer for 19.04 lakh shares would open on October 3 and close on November 1, 2003.

The last date for making a competitive bid was September 11, 2003, which saw Mallya's more than doubling the offer price to Rs 200.

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