The Hindu Business Line : Aroni Chemical: Accept

SHAREHOLDERS of Aroni Chemical Industries can consider accepting the open offer by Winro Commercial. Winro, part of the promoter group, is offering to pay Rs 66.8 (including interest of Rs 35.3 at 15 per cent for the period between July 1998 and January 2006). Though the offer price is well below its book value, it appears attractive in the light of the volatile share price movement, irregular trading and low volumes. The market price appears largely related to that of the open offer. The stock price picked up towards end-September in anticipation of the open offer. However, since the offer announcement, the price has declined.

The open offer seeks to comply with the Takeover Code in respect of a series of acquisitions and inter-se transfers made by the promoters. Winro, which holds a 15.76 per cent stake in Aroni Chemical, seeks to mop up 4.5 lakh shares representing a 10.98 per cent stake in Aroni Chemicals. The successful closure of the offer would lead to the promoters holding the company entirely.

Aroni Chemical, which was making aluminium chloride until 1999, has since then not carried out any significant business activity. The company liquidated most of its fixed assets in 1999 in favour of a joint venture — Atofina Catalyst India. In September 2004, Aroni Chemical transferred its shareholding in the joint venture to its partner — Atofina of France. The former now holds investments in equity and bonds. Aroni Chemical has transformed itself into an investment and financing entity; it is, however, yet to prove its mettle in this line.

JM Morgan Stanley is the manager to the offer which opened on December 9 and closes on December 28.

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