Financial Daily from THE HINDU group of publications
Friday, Jun 09, 2006
Financial Daily from THE HINDU group of publications Friday, Jun 09, 2006 |
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Personal Products Corporate - Mergers & Acquisitions P&G to acquire Gillette India on June 10
Kohinoor Mandal
Terms of acquisition No open offer for minority shareholders Acquisition is just extension of the global acquisition of Gillette by Procter & Gamble Gillette India shares drop 14 pc in one week
Kolkata , June 8 The US-based Gillette Company is gifting its Indian subsidiary — Gillette India Ltd — to its global acquirer, the Netherlands-based Procter & Gamble, in an out-of-market deal. So, there would not be any open offer for the minority shareholders, who hold around 12 per cent, as mandated under the takeover regulations of the Securities and Exchange Board of India (SEBI). Gillette India's acquisition by Procter & Gamble would be effected on June 10, this year, and it is just an extension of the global acquisition of Gillette by Procter & Gamble. Mr Saroj Kumar Poddar, Gillette India's Chairman, confirmed that there would not be any open offer for the minority shareholders. Mr Poddar, who holds approximately 20 per cent in the company, would continue to hold his stake. "According to the legal opinion received by the company, we have come to the conclusion that there is no need for an open offer as this arrangement does not amount to a takeover," he told Business Line. According to a notice sent to the stock exchange, Gillette India has informed that The Gillette Company, USA has been acquired — "by way of merger" — following the global acquisition effective from October 1, 2005. The Gillette Company, USA and its four Indian subsidiaries — Gillette Group India Pvt Ltd (GGIPL), Gillette Diversified Operation Pvt Ltd, Mining Consultant Pvt Ltd and Nexus Mercantile Pvt Ltd — hold 2.47 crore shares of Rs 10 each amounting to 75.88 per cent of Gillette India. Out of the total shares, 1.33 crore shares are held by Gillette Company, USA. Gillette Group India holds 66.27 lakh shares, while 47.37 lakh shares are held by the subsidiaries.
Off-market deal
"The Gillette Company, USA intends to transfer by way of gift, on June 10, 2006, or thereafter, in an off-market deal, its shareholding in GGIPL to another group company, Procter & Gamble India Holdings BV," the company stated. It further clarified that Procter & Gamble India Holdings BV will become an indirect acquirer of 1.13 crore equity shares of Gillette India and would hold 34.86 per cent stake in the company, which is now held by GGIPL and its four subsidiaries. Elaborating this arrangement, Gillette India explained that it does not fall under the mandatory open-offer clauses under the SEBI (Substantial Acquisition Of Shares & Takeovers) Regulations, 1997. The company went on to explain that the Netherlands-based Procter & Gamble India Holdings BV is part of its group, a fact that has been disclosed in its last annual report. Due to this development, the stock price of Gillette India has suffered a lot. At the Bombay Stock Exchange, the share price dropped by almost 14 per cent in the last one week. From Rs 781.70 on June 1 it fell to Rs 674 on Thursday.
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