The French company holds 10 per cent stake through GDRs
Videocon Industries' promoters, V N Dhoot and family, are all set to buy out Thomson SA of France in the consumer durables company.
Thomson holds 10 per cent stake in Videocon Industries through global depository receipts (GDRs) listed on the Luxembourg Stock Exchange. So, the Indian promoters will buy out these GDRs through their overseas investment arms when a lock-in period expires on September 30, sources close to the development said.
Thomson had acquired 13.5 per cent in Videocon in 2005 for Rs 1,250 crore of which 10 per cent was locked in for three years. The French company has already divested 3.5 per cent stake that was outside the purview of the lock-in to overseas institutional investors.
The Dhoots have the first right of refusal on the remaining 10 per cent, sources said.
V N Dhoot, chairman and managing director of Videocon Industries, said the lock-in period has not yet expired. "We have not received any notice. If they intimate us, we will react," he added.
Thomson will be exiting the company at a significant loss. It had acquired the stake at $10 per share equivalent to Rs 410 per share.
Although the value of the transaction is not yet known, sources said the deal is expected to be at around the current market price. Videocon's GDR is sparsely traded on the Luxembourg Stock Exchange and is currently trading at around $5.06 per GDR.
The company's share price on the Bombay Stock Exchange is around Rs 225 against the 52-week high of Rs 868 in January 2008.
The Dhoots currently own 67 per cent in the company. Life Insurance Corporation and Bennett, Coleman & Co have 2.5 per cent and 1 per cent, respectively. The rest is publicly held.
Being an overseas deal, the transaction will not attract the Indian market regulator's "creeping acquisition" norm that requires companies to declare their holdings once they acquire more than 5 per cent.
Sources said the two sides have already held discussions and are expected to close the deal sometime in the coming quarter.
Thomson's acquisition of stake was part of a comprehensive agreement in which Videocon Industries had acquired Thomson SA's global colour picture-tube manufacturing business, including units in China, Poland and Mexico for around Rs 1,250 crore.