Business Daily from THE HINDU group of publications
Wednesday, Jun 06, 2007
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Business Daily from THE HINDU group of publications Wednesday, Jun 06, 2007 ePaper |
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Aluminium Corporate - Mergers & Acquisitions Markets - Stocks
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Well-cushioned The promoters, Aditya Birla Group, would end up owning 35.29 per cent of the total prospective voting stock. LIC's holding of 8.62 crore shares would translate into 6.60 per cent of holdings.
Mumbai June 5 As rumours go, talk of a hostile bid on the Hindalco stock has had an all too brief a life. Prospect of a hostile joint bid by the Canadian aluminium producer Alcan and Sterlite had set off a frenzy of trading in the company's stock on Monday. But it was business as usual on Tuesday with trading returning to more normal levels. As against Monday's volume of 61.48 lakh shares, Tuesday's trading saw only 13.76 lakh shares changing hands. The price too, which fluctuated between Rs 142 and Rs 156.75 on Monday, settled into a somewhat narrower range of Rs 145 and Rs 148.70 in Tuesday's trading. Perhaps the market had missed on the previous day, the significance of the collective voting strength of promoters and public financial institutions that would have posed a formidable challenge to any hostile takeover attempt. Consider the evidence. The promoters hold not just 27.06 per cent stake — an otherwise inviting target for takeover rumours — as the March 31, 2007 data on shareholding pattern would seem to suggest but, in fact, have pushed their stake to 31.07 per cent as on April 11, 2007 when the company allotted shares on a preferential basis to the promoter group. That is not all. The company's board also decided in March to allot to them eight crore warrants which could be converted into equal number of shares at any time within 18 months of allotment. That would add another 4.22 per cent to their shareholding on the expanded capital base. The promoters, Aditya Birla Group, would thus end up owning 35.29 per cent of the total prospective voting stock. Add to this, the weight of shares held by Life Insurance Corporation. Its current holding of 8.62 crore shares would translate into 6.60 per cent of holdings when promoters convert their warrants into additional shares. The Government has all along maintained that the public financial institutions would not disturb the incumbent management of well-managed enterprises. Since it can be nobody's case that Hindalco is not being managed properly that means, LIC would vote with the present Aditya Birla Group in the event of a hostile takeover bid. They can thus count on a collective voting strength of close to 42 per cent. Any shares held by other public sector insurance companies and banks would be an added bonus.
More Stories on : Aluminium | Mergers & Acquisitions | Stocks | Hindalco Industries Ltd
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