The open offer process initiated by Lazard India on behalf of IP (International Paper) Holdings Asia Singapore PTE Ltd, along with International Paper Company (persons acting-in-concert) to acquire additional stake in Andhra Pradesh Paper Mills Ltd, has hit SEBI roadblock with the acquirers asked to revise open offer price.

The Securities and Exchange Board of India in its observation letter dated August 3 has called upon the acquirers to revise the offer price which the acquirers had indicated in the public advertisement. In the letter, SEBI has observed that certain promoter group sellers (members of the L.N. Bangur family) are not eligible to receive the non-compete fee. It has, therefore, directed that the open offer price be revised to include the non-compete fee.

According to a statement made to the stock exchanges, the acquirer, upset with the SEBI decision, filed an appeal before the Securities Appellate Tribunal (SAT) on August 5, seeking to set aside the above direction contained in the SEBI observation letter. It informed that the matter is likely to be heard shortly.

The NYSE-listed International Paper in March this year had announced it has signed up an agreement to acquire 53.5 per cent stake in AP Paper from Mr L.N. Bangur, his family members and affiliates, paying $257 million in cash with additional $62 million non-compete payment to the sellers totalling about Rs 1,435.5 crore.

The open offer is aimed at picking up additional 21.5 per cent stake of APPM for approximately $104 million (about Rs 468 crore), to take its stake up to 75 per cent. The open offer price was set at Rs 544.20 a share at a substantial premium to market price them.

The company shares are trading 3.56 per cent lower at Rs 360. 50.

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