The Hindu Business Line : Grasim exempted from open offer for CemCo

THE Securities and Exchange Board of India (SEBI) has exempted Grasim Ltd from having to make an open offer for CemCo, the cement company proposed to be demerged from L&T, and whose majority stake is to be acquired by Grasim, under an agreement between Grasim and L&T.

"The acquisition by Grasim of the shares of the unlisted target company i.e., CemCo in terms of the scheme of arrangement prior to the listing of shares of Cemco would be exempt under regulations (1)(j)(ii) & (k) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997," SEBI has said in its clarificatory letter to Grasim.

The letter was sent to Grasim as long back as September 30, 2003, in reply to clarifications sought by Grasim in their letter of September 23, 2003; however, the letter was put up on the SEBI Website on Tuesday.

In the event the open offer was being made under the takeover code (which is not the case), the financial institutions would not be treated as persons acting in concert with Grasim, the acquirer, as FIs are going to participate in the open offer to sell their securities to Grasim, SEBI has said.

The transfer of the CemCo shares to Grasim in terms of the scheme (including release from escrow) would not attract the provisions of the takeover code either, and Grasim would not be required to make a further open offer under the provisions as it would be exempt u/r 3(1)(j)(ii) of the SEBI (SAST) Regulations, SEBI has said.