The Telegraph
Thursday , October 7 , 2010
Since 1st March, 1999
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ITC keeps doors open for Oberois

Calcutta, Oct. 6: ITC today said it was open to discussions with hospitality major EIH for a possible co-operation in the future.

Yogi C. Deveshwar, chairman of ITC, said the company had held talks with EIH before Mukesh Ambani’s Reliance Industries checked in with a 14.7 per cent stake buy.

“We had discussions. There is no talk right now but I can’t say there will be no talks tomorrow,” Deveshwar told reporters on the sidelines of a CII meet today.

The hotels-to-tobacco major has been holding a 14.98 per cent stake in EIH for almost a decade, stopping short of a hostile takeover even as the threat loomed large over the Oberois, the promoters of EIH.

Over the last two years, ITC had been saying that it was not looking at a hostile takeover of EIH, but was keen to join hands and explore areas of co-operation.

The proposal never found support from EIH.

Today, Deveshwar officially admitted that ITC was in talks with EIH, which stopped after Reliance came in.

The ITC chairman left the media guessing on his company’s next move, especially about EIH’s forthcoming rights issue.

The EIH board has decided to make a Rs 1,300-crore rights offer to shareholders, leading to speculation on whether ITC will subscribe to it.

“When the offer comes, we will take the decision. It is not my decision alone, the board has to take a call,” he said.

If ITC does not fully subscribe to its entitlement of the rights share, its holding may come down.

But Deveshwar said the company’s holding in EIH was intact.

“That chunk (share) has not been reduced, that has not been affected (by the RIL deal),” the chairman said.

On whether ITC would seek a board position in EIH, he said the decision was left to the latter.

There is a speculation that EIH may offer a board berth to RIL whose stake is lower than ITC’s.

Deveshwar declined to comment on the merit of the Reliance deal. “It is between the buyer and the seller. What can ITC comment on that?”

The ITC chief also did not elaborate on why the talks with EIH did not materialise before the RIL deal was struck.

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