Adani-Holcim deal: LIC may exit Ambuja Cements, ACC via open offer

Insurer owns shares aggregating Rs 7,000 crore

Life Insurance Corporation (LIC) of India, which owns Ambuja Cements and ACC shares worth Rs 7,000 crore, may tender its shares in the open offers to be launched by the Adani family, which acquired Ambuja Cements for $10.5 billion (Rs 81,400 crore approximately) on Sunday.

Adani is making an open offer for Ambuja Cements at Rs 375 per share and Rs 2,300 per share for ACC.

Ambuja shares closed at Rs 368 on Tuesday, while ACC shares closed at Rs 2,226 per share. The dates of the open offers have not been announced yet.

LIC has made a sizeable gain in Ambuja and ACC shares in the past.

According to statistics collated by Business Standard, the Corporation had 8.9 per cent stake in Ambuja Cements worth Rs 1,243 crore as on June 2006. It currently owns 6.3 per cent stake in Ambuja worth Rs 4,487 crore. At the same time, the Corporation owned 10.2 per cent stake in ACC worth Rs 1,603 crore as on June 2006 and currently owns 5.7 per cent worth Rs 2,359 crore.

A banker said the success of the twin open offers worth Rs 31,140 crore to be launched by the Adani family will depend on the share-price movements of both companies.

“The small and minority shareholders will not offer shares if the market price is above the offer price and the open offer will fail,” said a banker close to the development.

Bankers said LIC is likely to tender its shares in both companies and will make a profitable exit.

“Talks are currently on between bankers to the offer and institutional investors, and a final decision will be taken before the offer closes,” said a banker.