Syntans asks Sebi to review Bayer offer price

By Praveen Chandran | 24 Jun 2002

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Mumbai: Indian Syntans Investments, a Chennai-based investment company, says it has asked the Securities and Exchange Board of India (Sebi) to review the offer price announced by Bayer CropScience AG to pick up the additional 32.92-per cent stake from the minority shareholders of Aventis CropScience India (ACI). Indian Syntans has around 4.5 per cent stake in ACI.

The company has alleged that the offer price of Rs 157 per share is much below the negotiated price of Rs 541. "The negotiated price should be factored in while determining the minimum offer price under regulation 20 (2) of the takeover code notwithstanding the status of the acquisition."

Currently, Aventis CropScience SA has 67.08-per cent stake in ACI, while institutions like General Insurance Company, Life Insurance Corporation and Unit Trust of India have around 5 per cent, Indian Syntans Investments has 4.5 per cent, while the balance is held by general public and others.

Says India Syntans chairman N Narayanan: "As per the regulation, the minimum price should be the highest of the negotiated price or the six-month average of the stock market price. Regulation 20(2) lays down that minority shareholders should get the same negotiated price as the promoter-shareholder in case of a change in management."

Bayer officials, in an e-mail reply, said the company has fulfilled all the requirements of the Sebi takeover code as well as its own corporate governance guidelines.

Narayanan says the negotiated price of Rs 541, as being sought by India Syntans, is on the basis of the cost of acquisition, number of shares and multiple to sales. "In this transaction, the cost of the transaction was around Rs 32,000 crore (euro 7.25 billion) to acquire Aventis CropScience AS."

Since the size of the deal is euro 7.25 billion, the negotiated price per share works out to Rs 541, he says. "Bayer's open offer price is based on the Sebi guideline of 26-week high-low average." Bayer, in its offer document, has said the negotiated price is not applicable in the case of ACI. But the company has not cited any reasons.

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