Open offer for Everest on hold

As a direct fall out of rescheduling of the Holdcem Cement Pvt Ltd (HCPL) open offer to shareholders of ACC and Ambuja Cement Eastern Ltd (ACEL), the offer for Everest India Ltd (EIL) has been put on hold. Tight scrutiny of the public announcements (PAs) undertaken by the Securities and Exchange Board of India (Sebi) has taken its toll, this time, on yet another open offer made on behalf of Accurate Finstock Pvt Ltd (AFPL) and Adani Port Infrastructure Ltd (APFL) to EIL shareholders (reports the Indian financial times). The acquirer (AFPL) and persons acting in concert (APFL) issued a PA on January 24, 2005 to acquire EIL shares, representing 20 per cent equity of the company at Rs 147 per share. The offer was to open on March 18 and close on April 6, 2005. According to Sebi sources, the reason for putting the EIL offer on hold is that the regulator is yet to issue observations on the draft letter of the offer filed by Enam Financial Consultant Pvt Ltd who is the manager to the offer. 

The EIL offer is a result of a transaction agreement entered into by the acquirer with Holdcem Cements Pvt Ltd (HCPL) on January 20, 2005, a day before HCPL made a PA to acquire shares of ACC and ACEL. As per the agreement, HCPL has undertaken to propose to the board of directors of ACC, if and when HCPL acquires control in ACC, that ACC sells 76.01 per cent equity capital of EIL representing 1.12 crore shares to AFPL, the acquirer of EIL. Another salient feature of the transaction agreement between the acquirer and the AFPL that the acquirer will acquire 76.01% of EIL shares (control shares) from the then board of directors at a fair value in lieu of cash. The fair value for the control shares will be negotiated and it will be agreed upon by ACC and AFPL, if and when HCPL shall have obtained control of ACC. The sources explained that the whole assumption of acquiring EIL is based on HCPL acquiring ACC. When the entire offer of Holcim is pending approval, there are very remote chances of Sebi issuing observations on the EIL draft letter so soon.