Sebi Halts Bayer Open Offer For Aventis Stake
Bayer CropScience's open offer to buy an additional 32.92 per cent stake in Aventis CropScience India (ACI) at Rs 157 per share has hit a roadblock with the Securities and Exchange Board of India (Sebi) asking the company to keep the offer on hold.
The offer was scheduled to open on July 24. Sebi has raised eye brows in the wake of Indian Syntans Investments, the 4.5 per cent shareholder in ACI, asking the market regulator to review the offer price announced by Bayer to pick up stake from minority shareholders of ACI.
Confirming the development, a Sebi spokesman said the market regulator has not yet cleared the open offer. "Sebi has sought clarifications from Bayer and the merchant banker. We have asked the company to put the offer on hold for the time being," he added.
When contacted, a Bayer spokesperson said in a communique: "The open offer from Bayer CropScience AG for the shareholders of ACI, which was to open on July 24 is slightly delayed due to additional information required by Sebi from Ambit, who are the merchant bankers."
The open offer came in the wake of Bayer CropScience AG of Germany buying out Aventis CropScience SA, the parent of ACI.
The Chennai-based Indian Syntans had alleged that the offer price of Rs 157 a share was much below the negotiated price of Rs 541. The negotiated price has not been factored in when determining the minimum offer price under Regulation 20 (2) of the Takeover Code, notwithstanding the status of the acquisition.
As per Sebi regulations in such matters, the minimum price should be the highest of the negotiated price or the six-month average of the stock market price. Regulation 20 (2) says that minority shareholders should get the same negotiated price as the promoter-shareholder in the case of a change in management.
Aventis CropScience has a 67.08 per cent stake in ACI, while institutions like GIC, LIC and UTI together have around 5 per cent, Indian Syntas and associates have 4.5 per cent, while the balance is held by the general public.
As per the Sebi guidelines, if Sebi raises any questions within 21 days of the public announcement and withholds approval for the offer, the company making the offer promoter will have to notify another date for the opening of the offer.