Financial Daily from THE HINDU group of publications
Thursday, May 04, 2006
Financial Daily from THE HINDU group of publications Thursday, May 04, 2006 |
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Corporate - Mergers & Acquisitions Markets - Stocks Our Bureau
Cementing ties Offer of four GACL equity shares of Rs 2 each for every five ACEL equity shares of face value Rs 10 each. Merger will extend Gujarat Ambuja's reach in the eastern region. GACL's total cement capacity will increase to 16 million tonnes.
Mumbai , May 3 Gujarat Ambuja Cements Ltd will amalgamate Ambuja Cement Eastern Ltd with itself, offering four equity shares of GACL of Rs 2 each for every five equity shares of ACEL of face value of Rs 10 each. This share ratio recommended by the GACL board on Wednesday (and also by the ACEL board), was based on a valuation report prepared by Deloitte Haskins & Sells, said a statement from the Ambuja Group.
Holcim stake
One interesting fallout would be that Swiss major Holcim's stake in GACL will increase to almost 24 per cent from 14.8 per cent, something that Holcim's recent open offer for GACL could not achieve. Holcim owns 67 per cent stake in Ambuja Cements India Ltd, which in turn owns nearly 96 per cent stake in ACEL. Holcim acquired 14.8 per cent stake in GACL early this year; this stake remained unchanged even after its open offer for GACL last month, which saw only 3.66 lakh shares tendered and accepted.
Dilution
Based on the proposed terms of merger of ACEL , GACL will issue about 15.4 crore equity shares of Rs 2 each to ACEL shareholders. Subsequently GACL's fully diluted equity capital would increase from Rs 271.02 crore to Rs 301.81 crore, a dilution of about 10.2 per cent. The merger is subject to approval from both GACL and ACEL shareholders and is expected to close by the end of this calendar year.
Eastern presence
The merger will extend Gujarat Ambuja's reach in the country's eastern region where ACEL leads in West Bengal and Chhattisgarh. GACL's total cement capacity will increase to 16 million tonnes, said a statement from the company. GACL gained by 3.24 per cent on the BSE, to close at Rs 125.95 on Wednesday while ACEL lost 3.81 per cent to close at Rs 95.85.
DIRECTORS appointed
GACL on Wednesday appointed three representatives of Holcim on its board as additional directors. They are Mr Markus Akermann (CEO of Holcim Ltd), Mr Paul Hugentobler (Executive Committee Member of Holcim Ltd) and Mr Nirmalya Kumar. The board also appointed Mr Shailesh Haribhakti as Independent Director. Two independent directors, Mr Nimesh Kampani and Mr M.T. Patel have submitted their resignation.
Related Stories: More Stories on : Cement | Mergers & Acquisitions | Stocks | Gujarat Ambuja Cements Ltd
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