Emami woos Zandu shareholders by increasing offer price to Rs16,500

03 October 2008

Personal care products maker Emami hasincreased its offer price  for the second time in barely over a fortnight in its bid to acquire a 20-per cent stake in herbal and ayurvedic products maker Zandu from Rs15,000 per share to Rs16,500.

The open offer commenced on 26 September and will close on 15 October and this revised price has just come in a fortnight prior to the closing of the offer which commentators interpret as an all out effort Emami to acquire the 20-per cent stake, that will take its holding to 47.5 per cent.

On 15 September Emami has more than doubled its offer price from Rs7,315 per share to Rs15,000. (See: Emami doubles offer price to Rs15,000 per Zandu share)

On 3 June it had made an open offer to Zandu shareholders to acquire up to 20 per cent outstanding stake in the company at Rs7,315 per share (See: Emami makes open offer for Zandu Pharma at Rs7,315 a share), after raising its 3.9-per cent stake in the company to 27.5-per cent in May when it  bought out entire 23.6-per cent stake the Vaidya family, one of the two promoter groups of the Rs150-crore Zandu, for Rs6,900 per share.

The open offer is in compliance with regulatory provisions that triger an automatic 20-per cent open offer in the event of an intending acquirer reaching a 15 per cent stake in the target firm.

In a regulatory filing Emami said, ''Emami Ltd along with PACs (persons acting in consert) has revised the offer price in respect of the public offer made by it for acquisition of Equity Shares of the Zandu Pharmaceutical Works Ltd from Rs15,000, per equity shares to Rs16,500 per equity share."