The Hindu Business Line : `The only bids that matter are final ones'

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Chennai Feb. 1 Is there a gag on Tata and CSN, the key players in the Corus deal, that they should not reveal what bids they made in the different interim rounds? How is secrecy ensured by the Panel? Is there a penalty for leaking out the info?

When Business Line posed these questions to Mr Roy Montague-Jones of the London-based law firm, Reed Smith Richards Butler LLP, he suggests that there may have been a stipulation in the detailed rules of the auction set by the Takeover Panel that the bids in the individual rounds would not be announced. He cites the Panel's announcement of January 26 thus: "It is expected that the increased bids (if any) lodged during the auction procedure will not be publicly announced by any of the parties... " The only exceptions to this gag are the final bids, points out Mr Montague-Jones.

"I don't think there is any incentive for the parties to leak details of the auction - the only bids that matter are the final ones," he says. "Any leak would be likely to be traced back to its source and could be the subject of public censure by the Panel, which everyone would want to avoid."

It is debatable though whether auction details should be transparent, to facilitate the process of price discovery, as in the case of auctions at Christie's or stock markets.

Just imagine, what a nice double helix we would have got on a graph, if only we had been armed with pairs of competing bids in the shootout phase of the Corus deal.

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