Financial Daily from THE HINDU group of publications
Wednesday, Jan 09, 2002
Mergers & Acquisitions
Corporate - Mergers & Acquisitions
KPC offers Rs 3.60 for Birla stake in MRPL
Balaji C. Mouli
NEW DELHI, Jan. 8
KUWAIT Petroleum Corporation (KPC) has offered a price of close to Rs 3.60 per share for the AV Birla group's 37.5 per cent stake in Mangalore Refineries and Petrochemicals Ltd (MRPL), according to sources familiar with the talks.
This is a significant improvement on the price quoted by Hindustan Petroleum Corporation Ltd (HPCL), the joint venture partner of the AV Birla group in MRPL.
The State-owned refiner had quoted Rs.1.60 per share for buying out the AV Birla group's stake over a month ago, which the Birlas had turned down. Besides KPC, the Sun group promoted by Mr Nand Khemka is also in talks with the Birlas for acquiring their stake in MRPL.
An AV Birla group spokesperson refused to comment on the issue. HPCL's offer of Rs 1.60 per share, made early last month, was well below the price expectation of the Birlas, who were hoping to obtain a price per share in the Rs 14-17 range, as evaluated by their consultants, SBI Capital Markets Ltd and Arthur Andersen.
Subsequently, KPC and the Sun group initiated talks with them.
Mr Khemka told Business Line: "Our company is in talks with several potential partners and wherever there is synergy, we will tie up."
For the past nine months, the AV Birla group has been seeking an exit from the joint venture with HPCL.
HPCL's offer price of Rs 1.60 for buying out the Birlas' holding corresponds to the estimation of the net asset value (NAV) of MRPL, with HPCL assuming a 50 per cent discount on the book value besides providing for contingent liabilities
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