Entities controlled by the Burman family of Dabur have received the approval from the Securities and Exchange Board of India (Sebi) to launch an open offer for dry cell battery maker Eveready Industries India Ltd.
The open offer for an additional 26 per cent stake in Eveready will open on June 3 and close on June 16 at a price of Rs 320 a share. The stock closed at Rs 315.2 on the NSE on Tuesday.
The company submitted the letter of offer to the stock exchanges and intimated the revised timeline of the offer, which included the last date for revision of the offer price.
While the five entities of the Burman family were awaiting the market regulator’s nod, the broader market crashed, taking Eveready below the open offer price. The weakness allowed the Burmans to shore up their holdings in Eveready as they acquired a 3.51 per cent share from April 13 onwards.
Put together these entities now hold a 23.36 per cent stake in Eveready as on Tuesday.
While the Burmans have so far ruled out revising the offer upwards, the last date for doing so has been fixed as June 1, according to the revised timeline published on Tuesday.
If the Burmans get full subscription at the price declared on February 28, the entities would have to shell out Rs 604.75 crore to acquire the shares tendered in the offer.
The prime objective, the offer letter says, is to have “substantial holding of equity shares, voting rights and acquisition of control of the target company. Pursuant to the offer and the purchase order, the acquirers and PACs will acquire control over the target company and the acquirers and PACs shall become the promoters of the target company, including in accordance with the provisions of Sebi (LODR) Regulations”.
The Khaitan family is the promoter of Eveready Industries at present with a meagre shareholding of 4.9 per cent.
Amritanshu Khaitan and Aditya Khaitan, who were the managing director and non executive chairman of the company, respectively, stepped down after the open offer was announced by the Burmans
When the Burmans take control and become promoter, they intend to join the board in a non-executive position, leaving the management in the hands of Suvomoy Saha, a professional and Eveready veteran, who was picked as the managing director for three years.
Once the Burmans become the promoter group, there is a possibility that the Khaitans would declassify themselves as ordinary shareholders in Eveready. The offer letter also stated that the acquirers do not plan to sell or lease any asset of the company now.
A special resolution will be taken to materialise if any such plan is considered within two years of the offer. It also said there is no proposal that can adversely impact employees or location of business of Eveready.