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Nusli Wadia wants exit route for all in hostile bids

Our Bureau

MUMBAI, Dec. 14

MR Nusli Wadia, chairman, Bombay Dyeing and Manufacturing Company Ltd, has suggested that all shareholders be provided with an exit route in instances of an `hostile takeover'.

His views assume significance as Bombay Dyeing has been the target of an apparent hostile bid by the Calcutta-based jute baron, Mr A.K. Bajoria.

At a SEBI-convened meeting of parties involved and affected in takeover bids, Mr Wadia said shares offered by the shareholders should be accepted by the acquirer even if it would mean crossing the existing 20 per cent threshold.

Alternatively, Mr Wadia, said the acquirers should make the offer for buying up to 51 per cent so that he had complete majority.

In an informal chat with presspersons, after the meeting, Mr Justice Bhagwati, chairman, takeover panel said the logic being exercised here was that in a hostile bid a situation may come where even the promoter may wish to exit.

``In an hostile environment all are equal even the management. Why should there not be an exit route for promoters also?'' he said.

With regard to creeping acquisition, Mr Wadia suggested that in cases of consolidation, there should be no limit set for promoters but there should be a lock-in period. The existing creeping acquisition limit, should, however, be applied to the acquirer.

Mr Wadia further suggested that in the case of a `friendly takeover', the non-competing price should also be taken into account when going in for an open offer.

What it entailed was siphoning off and splitting of the price of these shares.

Today's meeting was also attended by Mr Abhishek Dalmia and Mr Sanjay Bakshi of Renaissance Securities which is making an open offer to Gesco Corporation shareholders.

Mr Abhishek Dalmia, on his part, argued that acquisition of assets of target company without acquisition of shares should also form part of the takeover code.

He also raised the question of whether funding by an institution could be tantamount to acting in concert.

Commenting on the thin attendance, the SEBI chief, Mr D.R. Mehta, said the lack of interest among the other parties could have been due to the fact that other cases had either been withdrawn or in court.

The Bhagwati panel is to meet on December 15 to deliberate over the suggestions received during its interaction with the corporates, the investors, the industry associations over the past two days.

Justice Bhagwati said that a final decision was unlikely on Friday, the new regulations were unlikely to come into force before February 2001.