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Our Bureau

Bangalore Mar 20

Telecom gear manufacturer ADC has agreed in principle to acquire the 11 per cent stake held by Karnataka State Electronics Development Corporation Ltd (KEONICS) in Krone Communications (Krone India) through its subsidiary ADC GmbH.

ADC will pay KEONICS Rs 169 per share, a 52 per cent premium to the prevailing market price. KEONICS presently holds 5,06,000 shares in Krone India. At Rs 169 a share, KEONICS will realise a little over Rs 8.55 crore by offloading its stake in Krone. Tracking the announcement, shares of Krone Communications fell about 3 per cent to close at Rs 111.25 on the BSE on Tuesday.

Following the closing of this transaction, which is subject to certain conditions, ADC's stake in Krone Communications will increase to 62 per cent. In 2004, ADC acquired Krone Group worldwide.

Open-offer

However, the Indian operations continued to be a publicly listed joint venture between ADC GmbH, which held 51 per cent and KEONICS which held 11 per cent while the public holding was 38 per cent.

Pursuant to the acquisition of 51 per cent stake in Krone Communications in early 2005, ADC had made an offer to acquire an additional 23 per cent stake. However, the open-offer did not sail through, as the price of Rs 92 offered by ADC was unattractive and significantly lower than the then market price of Rs 130.

Additional Stake

The ADC Krone CFO, Mr Gokul Hemmady, recently told Business Line that the company might revisit the open-offer for acquiring additional stake in Krone Communications Ltd. "If we get the right price, we will look at it," said Mr Hemmady.

More Stories on : Mergers & Acquisitions | Telecommunications

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