SEBI tell Actis to hike Phoenix open offer by 25 per cent

Mumbai: The Securities and Exchange Board of India (SEBI) has asked buyout fund Actis to increase the price of open offer for the minority shareholders of Phoenix Lamps by 25 per cent to Rs190 a share.

The open offer was made after Actis bought the entire 37 per cent stake in Phoenix Lamps from its promoters, the Gupta family.

Priced at Rs152 a share, the mandatory 20 per cent public offer was supposed to open on August 31 and close on September 19.
The capital market regulator Sebi has asked Actis to pay the same price it offered to the promoters.

Actis had agreed to pay Rs190 a share to the promoters of the company, 25 per cent higher than the price of the open offer on account of non-compete fees, an agreement the market regulator did not find merit in.

In a two-pronged deal, Phoenix Lamps had announced in July that Actis would buy 8.73 million shares, representing 37 per cent stake, from the promoters of Pheonix Lamps.

It also announced to allot 4.1 million convertible warrants to Actis at Rs102 apiece. The warrants will be converted into equal number of equity shares after 18 months.

Payment of non-compete fees is not uncommon in mergers and acquisitions in India.