The Hindu Business Line : Advani Hotels moves against Delta Hospitality

Mumbai, June 3 Advani Hotels and Resorts India Ltd on Tuesday announced that it has filed an appeal before SAT against Delta Hospitality (earlier known as Fast Track Impex Pvt. Ltd.) and SEBI relating to the open offer made by Delta for acquisition of shares of Advani Hotels.

Fast Track Impex started to acquire shares in Advani Hotels from the open market in October 2006, and had informed Advani Hotels in stages of their acquisition into the company. In December 2007 Fast Track had informed Advani that its stake had reached 14.42 per cent. In a hostile takeover move, Fast Track in February this year made an open offer to Advani Hotels’ shareholders to purchase 20 per cent stake, saying its own stake was now 14.93 per cent.

The contention of Advani Hotels is that Fast Track had crossed the 15 per cent mark in Advani Hotels long before it had announced the open offer, and that there were other companies acting in concert with Fast Track in purchasing shares of Advani Hotels. In addition, Fast Track had crossed the 5 per cent annual stake limit in acquiring Advanti Hotels shares, violating SEBI’s takeover regulations.

Advani Hotels has also contended that persons acting in concert later transferred their shares in Advani Hotels to Fast Track through block deals. In fact by mid-May 2008 Fast Track had informed Advani Hotels that its shareholding in the company was now 25.31 per cent.

Advani Hotels’ contention is that this was also in violation of the takeover code, as Fast Track had acquired into the company even after it had announced its open offer.

Advani now wants the open offer which was approved by SEBI to be considered for cancellation. And, should this not be possible, then the open offer must be permitted for only 9 per cent stake and not for 20 per cent, since Fast Track appears to have acquired 11 per cent even after the announcement of the public offer.

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