- BSE Code = 500068
- Face Value of Shares = Rs. 10.00
- Offer Type = u/r 10, 11 & 12
- Offer Rate = Likely to be revised
- Date of Opening = 05 Feb 2009
- Date of Closure = 24 Feb 2009
- Date of Payment = 11 Mar 2009
Tuesday, December 23, 2008
Disa India Ltd.
Indo Tech Transformer Ltd
- BSE Code = 532717
- Face Value of Shares = Rs. 10.00
- Offer Type = u/r 10 & 12
- Offer Rate = 406
- Date of Opening = 29 Jan 2009
- Date of Closure = 17 Feb 2009
- Date of Payment = 4 Mar 2009
FEM Care Phar
- BSE Code = 524608
- Face Value of Shares = Rs. 10.00
- Offer Type = u/r 10 & 12
- Offer Rate = 800
- Date of Opening = 15 Jan 2009
- Date of Closure = 03 Feb 2009
- Date of Payment = 18 Feb 2009
Tata Teleservice Maharashtra Ltd
- BSE Code = 532371
- Face Value of Shares = Rs. 10.00
- Offer Type = u/r 10 & 12
- Offer Rate = 24.70
- Date of Opening = 19 Feb 2009
- Date of Closure = 12 Mar 2009
- Date of Payment = 27 Mar 2009
Tuesday, December 2, 2008
Open Offer of Tata Teleservices (Maharashtra) Ltd. (TTML)
Observations in Public Announcement (PA) for Open Offer of Tata Teleservices (Maharashtra) Ltd.
1. Tata Sons Ltd. (TSL) has been teamed up as PAC (person acting in concert) with the acquirer NTT DOCOMO INC. Japan. TSL is already identified as promoter (TSL Holds 20.72% shares in TTML) in the corporate filing by TTML as on 30th September 2008. Thus the Open Offer should be under Reg. 10,11 & 12 and not merely Reg. 10 & 12
2. TSL has been identified as PAC (“Refer clause 8 of PA”) in terms of Regulation 2(1)(e)(1) of the SEBI (SAST) Regulations, however the definition o PAC given in the said clause does not fit TSL. TSL is not acting “for a common objective or purpose of substantial acquisition of share or voting rights or gaining control over the target company” as stipulated in the regulation. Rather TSL’s objectives are just the reverse & contradictory. TSL as such can not become PAC of the acquirer.
3. In clause 4 of PA it is mentioned that (“The Acquirer also proposes to enter into a share Purchase Agreement (“SPA”)”),with TSL to acquire a further 6% of the fully diluted equity share capital of TTSL”) thus on the one hand TSL is selling the shares and on the other wants to buy the shares through the open offer. Such arbitrage opportunities can not be allowed.
4. Even the reputed promoters like Docomo & Tata’s are shying away from acting in a transparent manner and disclosing full facts of valuation. Negotiated price, obligatory for them to disclose as per the regulations, has not been given. Please refer clause 16(a) of PA --against negotiated price it is written ”Not Applicable” This statement is far from truth. When the object and interest is the target company, obviously a specific valuation must have been attributed to Tata Teleservices Ltd. (TTSL) interest in the target company. It is worthwhile to note that the Acquirer & PAC let the whole world know the basis of valuation which has been reported as $354(Rs. 17,271) per subscriber (see attached report).
In the light of the above you are requested to please:
1. Clarify whether a promoter and seller can also be an acquirer for the open offer? If not, TSL may be asked to not act as PAC.
2. As per the press report attached TTSL has been valued at Rs. 50604 Crs. On the basis of 29.30 million subscribers at Rs. 17,271/- ($354) per subscriber, accordingly the valuation for TTML can be worked out. On 20th May 2008 TTML informed NSE that it has crossed 5 Million Subscribers. This means that the valuation of TTML has been considered at Rs.8,635 Crs. Or Rs.45 per share. NTT DOCOMO and Tata’s must be asked to give truthfully the valuation per share of TTML considered for the transaction.
3. The negotiated price as above must be disclosed & in case it is higher than the offer price of Rs.24.70, then the offer price must be suitably revised.
1. Tata Sons Ltd. (TSL) has been teamed up as PAC (person acting in concert) with the acquirer NTT DOCOMO INC. Japan. TSL is already identified as promoter (TSL Holds 20.72% shares in TTML) in the corporate filing by TTML as on 30th September 2008. Thus the Open Offer should be under Reg. 10,11 & 12 and not merely Reg. 10 & 12
2. TSL has been identified as PAC (“Refer clause 8 of PA”) in terms of Regulation 2(1)(e)(1) of the SEBI (SAST) Regulations, however the definition o PAC given in the said clause does not fit TSL. TSL is not acting “for a common objective or purpose of substantial acquisition of share or voting rights or gaining control over the target company” as stipulated in the regulation. Rather TSL’s objectives are just the reverse & contradictory. TSL as such can not become PAC of the acquirer.
3. In clause 4 of PA it is mentioned that (“The Acquirer also proposes to enter into a share Purchase Agreement (“SPA”)”),with TSL to acquire a further 6% of the fully diluted equity share capital of TTSL”) thus on the one hand TSL is selling the shares and on the other wants to buy the shares through the open offer. Such arbitrage opportunities can not be allowed.
4. Even the reputed promoters like Docomo & Tata’s are shying away from acting in a transparent manner and disclosing full facts of valuation. Negotiated price, obligatory for them to disclose as per the regulations, has not been given. Please refer clause 16(a) of PA --against negotiated price it is written ”Not Applicable” This statement is far from truth. When the object and interest is the target company, obviously a specific valuation must have been attributed to Tata Teleservices Ltd. (TTSL) interest in the target company. It is worthwhile to note that the Acquirer & PAC let the whole world know the basis of valuation which has been reported as $354(Rs. 17,271) per subscriber (see attached report).
In the light of the above you are requested to please:
1. Clarify whether a promoter and seller can also be an acquirer for the open offer? If not, TSL may be asked to not act as PAC.
2. As per the press report attached TTSL has been valued at Rs. 50604 Crs. On the basis of 29.30 million subscribers at Rs. 17,271/- ($354) per subscriber, accordingly the valuation for TTML can be worked out. On 20th May 2008 TTML informed NSE that it has crossed 5 Million Subscribers. This means that the valuation of TTML has been considered at Rs.8,635 Crs. Or Rs.45 per share. NTT DOCOMO and Tata’s must be asked to give truthfully the valuation per share of TTML considered for the transaction.
3. The negotiated price as above must be disclosed & in case it is higher than the offer price of Rs.24.70, then the offer price must be suitably revised.
Monday, June 30, 2008
Ranbaxy Open Offer
The above Open offer from one of the most prestigious and front line company of the country should also be the most perfect and an example to follow from the regulatory compliances & corporate governance point of view. Kindly note the following observation: a) Clause 1.5 states that the “Independent Directors” shall be nominated by the 2 groups. This certainly is not the best way to demonstrate the independency of such Directors.b) Clause 1.5 states that the sellers shall have the right to appoint 4 Directors! Under what capacity? They will not be even a shareholder. What about the rights of 1.84 lacs shareholders? Is it not an infringement of their rights? c) Clause 1.7 gives the price of shares for 26 weeks and 2 weeks preceding the offer. There is a significant appreciation in the price towards the Offer date. As in all such cases, I request that such price movement should be investigated.d) Clause 3.3 while calculating the ‘Emerging Voting Capital’ has excluded 238 lacs warrants to be issued to the Acquirers. It should be clarified that the warrants so issued shall not be converted into equity shares within the time frame stipulated (15 days after the closure of the offer) as prescribed under regulation. In case the Closure of the offer gets delayed for any reason and these warrants get converted within the above time frame, the Size of the Open offer shall be suitably revised upwards.e) Clause 4.1 gives the shareholding percentage of the Acquirers but fails to state that even after acquiring 58.09% shares they will still be left with warrants which will entitle them to acquire further 238 lacs shares.
Recommendation-buy to tender in the open offer
The Daiichi Sankyo-Ranbaxy transaction, one of the biggest among generic deals so far, at a market capitalization of about Rs 20356.51 crore and sales of Rs 6692.67crore for FY08. Ranbaxy EPS on December FY08 is 20.76 which is likely to move to 24.70x in December FY09. At the current market price of Rs 523.5 the stock is trading at P/E of 25.22 and P/E of 21.19x in FY09. At the effective price of Rs 392.73 the P/E will be 15.90x for FY09 which means that at Rs 392.645 it becomes a good value buy.
Recommendation-buy to tender in the open offer
The Daiichi Sankyo-Ranbaxy transaction, one of the biggest among generic deals so far, at a market capitalization of about Rs 20356.51 crore and sales of Rs 6692.67crore for FY08. Ranbaxy EPS on December FY08 is 20.76 which is likely to move to 24.70x in December FY09. At the current market price of Rs 523.5 the stock is trading at P/E of 25.22 and P/E of 21.19x in FY09. At the effective price of Rs 392.73 the P/E will be 15.90x for FY09 which means that at Rs 392.645 it becomes a good value buy.
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