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SEBI halts Ondeo Nalco open offer plan

Jayanta Mallick

Kolkata , Jan. 10

THE Securities and Exchange Board of India (SEBI) has stalled the open offer proposal by the new acquirer of Ondeo Nalco India Ltd. The market regulator has asked the consortium of investors lead by Goldman Sachs and the managers to the offer, ICICI Securities, not to proceed with it.

The new acquirers had planned to open the offer on January 15 and had filed the letter of offer following a public announcement.

According SEBI sources, the fresh offer effectively called into question the provisions of the takeover regulations as also the regulator's earlier verdict on an open offer by the previous acquirer of the company.

Hence it would like to take a holistic view on the issue of two successive takeovers of the same company effected through deals abroad and the first verdict on the open offer is still lying before an appellate authority.

"The present proposed letter of offer did not recognise the past liability of the acquirer/promoters, but came as a stand alone offer to buy the stake in the company under the takeover code," said a merchant-banking source.

A section of minority shareholders also raised objection to the proposed fresh open offer for 20 per cent stake in Ondeo Nalco India Ltd, a water treatment and chemical company, by its new overseas parents on the ground that the current offer price was much lower than the SEBI determined price in the earlier case.

The earlier SEBI verdict, which also factored in the interest element on the offer price due to delay in following the takeover code, was contested by Suez, a French MNC and previous acquirer of 80 per cent stake in Ondeo Nalco India.

The SEBI had ruled that Suez takeover of Nalco India's US parent in 1999 had triggered the Indian takeover norms for the effective change over of control in the Indian subsidiary. The case is now with the Securities Appellate Tribunal (SAT).

A consortium of private investment companies comprising Blackstone Group, Apollo Management LP and Goldman Sachs Capital Partners, by virtue of their recent acquisition of Ondeo Nalco, US, the parent of Ondeo Nalco India, now holds 80 per cent in the Indian outfit.

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