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June 12, 2001
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Money > Business Headlines > Report June 12, 2001 |
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HSBC unaware of higher offer to FIs in Modi RubberBS corporate bureau HSBC Securities & Capital Markets (India) Ltd -- the merchant bank managing the open offer of Vinay Kumar Modi and Bhupendra Kumar Modi for a 35 per cent stake in Modi Rubber at Rs 81.50 per share -- has denied any knowledge of financial institutions being assured of a higher price before the offer opened. "We are not aware of any such pact," HSBC sources said. The official was responding to reports that the price indicated to the institutions was much higher than Rs 81.50. The institutions, which together hold a 44.3 per cent stake in the company, have said that they want the acquirers to revise their offer price. Meanwhile, HSBC sources said that they are trying to initiate fresh dialogues with the institutions. "Till now, we have not been able to touch base with the FIs but the situation is being evaluated and we would be getting in touch with them shortly," they said. Information suggests that the institutions had expressed their willingness to sell their shares to the Modi brothers through an open offer subject to certain conditions. One, the open offer shall be made in such a manner that it covers the entire shareholding of the FIs. Two, in case the FIs are still left with some shares after the open offer has closed, the Modi brothers will have to buy those shares at the same price. Three, the institutions will subscribe to the open offer only if the offer price is acceptable to them. Four, in case there is a counter offer for the stake of the FIs, the Modi brothers will have to match the counter offer price. But the entire shareholding of the institutions is unlikely to be covered in the open offer. "Other shareholders can also subscribe to the open offer. The applications will be accepted on a pro rata basis," HSBC sources added. According to observers, the institutions could be demanding a higher price because of the rising share price of Modi Rubber. The share price of the company has gone up from Rs 45 when the open offer was announced to Rs 70.50 on the Bombay Stock Exchange now. Powered by YOU MAY ALSO WANT TO READ:
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