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Boby Kurian

Bangalore , June 8

THE UB Group has decided to pare its acquisition of the Manu Chhabria family's stake in Shaw Wallace & Co Ltd (SWC) to 50 per cent in a bid to comply with new SEBI guidelines on promoter holding.

The Chhabria family will offload its remaining 4.54 per cent stake in the open market.

A top UB official told Business Line that the company would limit the purchase of the Chhabria family's stake to 50 per cent to fit in with the regulatory guidelines. The source added that the exiting promoter family has decided to offload the remaining shares (estimated about 22 lakh shares) in the market. However, he did not divulge whether the latest development would alter the financial contours of the original deal. When contacted, the Jumbo Group refused to comment.

On March 21, the domestic spirits leader UB inked an agreement with the Chhabria family-managed Jumbo Group to purchase the latter's 54.54 per cent stake in rival SWC for Rs 1,300 crore in a transaction valued at Rs 325 per share.

Alongside, UB also made an open offer for up to 25 per cent of outstanding shares of the target company, which together would take the combined shareholding of the new promoter to over 80 per cent, contravening fresh SEBI guidelines that promoter holding in listed companies should not exceed 75 per cent.

The UB official said financial closure of the acquisition would be achieved in the coming days. "There is a team working on it, and we will announce it shortly," he said. The group official said there was no plan to look at a second open offer for the outstanding SWC shares.

SWC shares have witnessed volatility in recent weeks with block deals at the counter.

On Tuesday, nearly 1.40 lakh shares changed hands in early trading. The stock closed the day at Rs 187 with traded volume of 2.41 lakh shares.

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