Seamless success
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better valuation has
21 June 2003
Our
Corporate Bureau
21 June 2003
Mumbai:
The Grasim Industries-Larsen and Toubro (L&T)
saga has finally come to a happy ending.
The story began about three years back when L&T was considering getting out of its cement division if it got a right price for it. The well-known transnational cement company Lafarge showed interest but the price being offered, about $65 per tonne of cement capacity, did not match L&T's expectations.
A little while later, Grasim, another major player in the cement industry, bought over the equity stake of about 11 per cent, which the Ambanis held in L&T. The shares were bought at Rs 306 per share. It was clear at that time that Grasim wanted to consolidate its share of the cement business.
Grasim's next move was to increase its stake in L&T. This it did partly by buying L&T shares in the market and by making an open offer to the existing shareholders of L&T for buying the shares at Rs 190 per share. The offer did not find a good response.
L&T's
plans for exiting the cement business, which was in the
backburner, was revived with Grasim and CDC Capital partners
evincing interest. After several proposals and protracted
negotiations, the L& T cement demerger plan was finally
agreed to between Grasim and L&T.
