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Aarati Krishnan

SYNGENTA India shareholders can tender their holdings to the open offer made by Syngenta South Asia on behalf of Syngenta India's Swiss parent, Syngenta AG. Not only is the open offer price attractive, the parent is likely to pursue the open offer until it mops up enough shares for eventual de-listing of the Indian company. Syngenta South Asia is making an open offer at Rs 130 per share, to acquire the 49.01 per cent public holding in Syngenta India with a view to eventually delisting the company. Already, the parent indirectly holds a 50.99 per cent stake in the Indian company.

The open offer price of Rs 130 per share discounts Syngenta India's 2001-02 earnings by around 17 times. The valuations of Syngenta's MNC peers operating in India ranges between 11 and 12 times their latest earnings. The offer price is also attractive if one takes into account the historical price trends in the Syngenta India stock since being listed. This apart, Syngenta India shareholders may stand to gain if they take the first exit opportunity from the stock. For one, since the parent has a policy of operating through wholly-owned subsidiaries, it is quite likely to pursue this open offer until the eventual delisting of the stock. Since delisting appears inevitable, shareholders may be better off exiting the stock at the earliest opportunity and the putting the money to work elsewhere.

Second, it is clear that the Indian company will have greater access to the parent's global portfolio of products only after it becomes a wholly-owned subsidiary.

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