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June 5, 2001
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Money > Business Headlines > Report June 5, 2001 |
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BAT to toe ITC line on VSTPradeep Gooptu BAT Plc, the London-based global tobacco and insurance major which holds 32 per cent stake in VST Industries, said on Monday that it will take a call on future course of action once the intention of the buyer making the open offer for VST equity becomes clear. However, it added that ITC Ltd's advice will be crucial in the decision-making process. "BAT will decide on its future role once it becomes clear who the investor in VST is, after the Bright Star offer closes," Michael Prideaux of BAT said. "BAT feels that a buyer making a renewed offer for 30 per cent stake in VST, over and above its existing stake of 16 per cent, and that too at a price above the market, has clear intentions that extend beyond mere investment," he added. Prideaux said they will have to be comfortable with the eventual investor in VST if the company is to be run by BAT. There are BAT operations elsewhere in the world also where it has a smaller stake than a local partner, but "BAT will not be in business with a partner with which it is not comfortable." Prideaux added that BAT will rely greatly on the advice of ITC before deciding on a future course of action. Prideaux said, "ITC was kind enough to consult BAT before its counter-offer, which BAT endorsed in view of its confidence in ITC... and this continues to be the case. ITC has kept us fully informed of developments and, naturally, BAT will be advised by ITC when it has to decide on its role after the offer closes." Bright Star and its managers have always maintained that their buying is for investment purposes. The Damanis have in the past held investments in the region of 10 per cent in blue-chip companies for investment purposes, but none have been of the size of the VST offer. Bright Star Ltd, an investment firm of the Damanis of Bombay, has made an open offer for 30 per cent of the equity of VST Industries at Rs 151 per share, which is way above the market price of the scrip at Rs 135.80. BAT has been backing the counter-offer by Russell Credit Ltd, an investment arm of ITC Ltd, for 20 per cent of VST at Rs 125 per share. Powered by YOU MAY ALSO WANT TO READ:
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