Mumbai, Oct. 10: Life Insurance Corporation (LIC), the only contender for Harshad Mehtaís 9.5 per cent stake in ACC, agreed to hike its bid from Rs 163 to Rs 170 a share.
The denouement had its share of drama as well: Ashwin Mehta, the brother of the former Big Bull, made a last-ditch attempt to scupper the sale. His lawyers argued that LICís bid was too low compared with the current price of the ACC share on stock exchanges. He said the 1.62 crore ACC shares could be split into smaller lots and sold to several bidders, at better prices.
Both arguments were overruled by the special court supervising the sale of the scam-tainted shares. The court asked representatives of LIC to revise the bid price. They did so, setting Rs 170 as the final rate, after clearance from the top-brass during the course of the hearing.
LIC insisted that the shares were merely an investment, not a strategic stake. However, events showed it was preparing itself for the big day. It had been selling its existing ACC stake, taking advantage of the high prices in the market. Currently, it holds a little over 10 per cent, down from 15 per cent earlier. That way, it will be able to keep its holding below 20 per cent even after it has snapped up Mehtaís shares. IRDA regulations cap an insurerís stake in a firm at 20 per cent.
After LIC, Gujarat Ambuja is the second largest shareholder with less than 15 per cent. LIC, sources say, could ask for another berth on the ACC board. Gujarat Ambuja has three nominees.