Reckitt Hikes Stake In Local Arm By 36%

Reckitt Benckiser Plc has increased its stake in its Indian subsidiary from 51 per cent to 87 per cent through the open offer that closed last week. The open offer at Rs 250 a share was aimed at acquiring an additional 49 per cent stake in Reckitt Benckiser India.

However, poor response from some financial institutions and other investors resulted in an increase of just 36 per cent.

According to merchant banking executives close to the development, the company is yet to take a final decision on whether to take the open offer into the second round. Reckitt Benckiser Plc was aiming to acquire a 100 per cent stake in its Indian subsidiary.

"The offer received good response. Approximately 11.9 million shares were tendered. Many institutional shareholders tendered their shares in the offer. The response from retail investors was also good," Reckitt Benckiser said in a press release.

The foreign parent holds a 51 per cent stake Reckitt Benckiser India, financial firms hold around 26 per cent, while the public holds the rest.

Reckitt Benckiser Plc had earmarked Rs 403 crore to hike its stake. It had hired HSBC Securities and Capital Markets to act as manager to the offer.

The open offer was in line with Reckitt Benckiser Plc's international business strategy of owning 100 per cent subsidiaries in leading markets.

At present, the Indian subsidiary, which offers brands such as Dettol, Harpic and Mortein, contributes around 3 per cent to the global turnover.

Reckitt Benckiser India, which owns over 20 brands in personal hygiene, household and over-the-counter segments, recently identified Dettol, Harpic and Mortein as its power brands.