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Kohinoor Mandal

KOLKATA, Dec. 9

THE Sardas' attempt to acquire a 30 per cent equity stake in the textile company, BSL Ltd, through an open offer has failed

Merchant banking sources said that the response to the Sardas' offer was poor. They were able to mop up less than 19 per cent of the equity stake from the offer, which was open for a month from November 7.

The offer made by the Sardas was a conditional one. It meant that if the response was less than 30 per cent, they had the option of not buying even a single share. As of now, the company has decided to avail of this option and return the application.

As per the Securities and Exchange Board of India's mandatory stipulations for such an offer, the Sardas kept 50 per cent of the proposed acquisition money in an escrow account. The sum involved was about Rs 9.82 crore and the account is with Tamilnad Mercantile Bank.

According to industry sources, the Sardas have already informed their merchant banker, SBI Capital Markets Ltd, about their decision. With this, their attempt to takeover BSL which owns brands such as Bhilwara Suitings and La-Italica, has received a jolt.

It may be noted that the Sardas offered a price of Rs 80 for every Rs 10 equity share of BSL through their group company, Kolmak Chemicals Ltd. In the one-month period when the offer was open, the share price of BSL hovered from Rs 57 to Rs 61 and it did reach a high of around Rs 70.

Sources in the merchant banking industry told Business Line that there was a good response to the Sardas' offer from block shareholders like institutions and non-resident Indians (NRIs).

However, it is not too clear whether the Sardas will make a fresh offer. Company sources only said that as of now no such decision had been taken and the matter would be taken up for fresh consideration in future.

The Sardas have already acquired almost 12 per cent stake in BSL through creeping acquisition from the market. The promoters of BSL — the Kolkata-based Churiwals and the Noida-based Jhunjhunwalas — are reported to have a stake of 42 per cent in the company.

With the open offer failing, the fate of the court cases and adjudication process before the Securities and Exchange Board of India against the open offer is unclear.

It may be noted that the promoters have already filed a petition against the open offer and SEBI at the Rajasthan High Court citing violations of takeover norms on 33 issues. The matter was first heard by the Jodhpur Bench on November 28 and it will be again heard on December 12.

Moreover, an adjudication process was also initiated by the market regulator on this open offer. A letter disclosing this step was issued on October 18. Legal experts said that these cases had lost significance as the open offer itself had failed.

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