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Boards okay Bisnauth merger with Eveready on 4 for 3

Our Bureau

CALCUTTA, Dec. 14

THE boards of The Bisnauth Tea Company Ltd and Eveready Industries India Ltd in their respective meetings today approved a scheme of amalgamation of Bisnauth with Eveready with retrospective effect from April 1, 2000.

The boards of the two B.M. Khaitan group outfits recommended an exchange ratio of four fully paid-up equity shares of Eveready for three fully paid-up equity shares of Bisnauth ``on the basis of a comparative valuation made by Price Waterhouse and Lovelo ck & Lewes''.

The face value of the shares of both Bisnauth and Eveready is Rs. 10 each. The two companies informed stock exchanges of these decisions.

According to a press note issued by the group, steps are being taken to obtain sanction of the Calcutta High Court for the scheme of amalgamation on the basis of the recommended share exchange ratio.

The press note observed that the amalgamation, when effective, would facilitate consolidation and strengthening of the entire operations of the two outfits under one umbrella.

Bisnauth's tea business would derive benefits from the synergy of operations. It would also be able to expand into the value-added tea segment in which Eveready ``has already carved out a niche for itself''.

Informed quarters interpreted the swap ratio as being in favour of Bisnauth shareholders ``possibly because the valuers were convinced of the company's intrinsic worth.''

The B.M. Khaitan group has a stake of a little over 75 per cent in Bisnauth, whose paid-up equity capital is Rs. 14.69 crore. The group's holding is 44 per cent in Eveready, whose paid-up capital is Rs. 36.19 crore.

Between November 14 and December 13, the Rs. 10 Eveready share has improved on Lyons Range from the Rs 29-30 range to between Rs. 34.50 and Rs. 35.20. Today, it closed at Rs. 35.80. The Rs. 10 Bisnauth scrip, not active, quoted at Rs. 30.20 on December 1 1, which was its 52-week high. Today, it opened and closed at Rs. 31.70.

As already indicated, after this amalgamation scheme is formalised in all respects, the Khaitans, in the next step, is likely to separate Eveready's expanded tea business into one company and thereby leave Eveready with its original battery business.