Mumbai, Oct 30 :    Mumbai, Oct 30:  In a surprise move, Bombay Dyeing & Manufacturing Company said its board will meet tomorrow to discuss the merger of its wholly-owned subsidiary Scal Investments with the company. The timing of the move has perplexed corporate mavens as it comes at a time when the company is fighting to ward off a hostile takeover by jute baron Arun Bajoria who has cornered around 14 per cent of the company's equity. S S Kelkar, Bombay Dyeing's executive director and the company's official spokesperson, refused to spell out the rationale for the merger. 'The board is meeting tomorrow and it will inappropriate for me to comment on the issue at this juncture,' he said. In 1982-83, Bombay Dyeing had sold its flats and properties not connected with its operations to Scal Investments Ltd, its wholly owned subsidiary. Investors will find Scal Investments attractive because of its huge funds parked in debt securities and its valuable real estate in Mumbai. Scal Investments, in turn has a 100 per cent subsidiary called Scal Services. Bombay Dyeing has a few other wholly-owned subsidiaries like Archway Investment and Pentafil Investment. The company has been periodically developing small chunks of its real estate in the city. One landmark property developed by the company houses the famous 'Twin Towers', near Prabhadevi, in the central suburbs. Corporate observers tracking the industry say it has become a sort of trend for companies to merge their profitable subsidiaries with themselves to boost investor value. Earlier, these subsidiaries were set up to avoid taxes and the profits of these subsidiaries were routed back by way of dividends. After the announcements in this year's Union budget, the strategy to subsidiarise has become less attractive for corporates. This is in view of the hike in dividend tax on corporates. The loss-making Tata Chemicals merged its investment subsidiary Sabras Investment (which made a killing in ACC shares) with the company. Sabras Investment had made huge profits during the year by selling ACC shares to the Sekhsarias of Gujarat Ambuja Cement. On similar lines, pharma companies like Sun Pharma and Glenmark are said to have de-subsidiarised its wholly-owned 100 per cent export oriented companies foregoing their export benefits while at the same time benefiting from higher profits accruing to the parent company by way of saving on dividend tax. Corporate circles are speculating whether there is any connection between today's announcement and the strategy to ward off Bajoria which the Wadia-owned textile giant is certain to deny. The balance sheet after the amalgamation will be healthier and as a result, the shares might get a better valuation.