Mnc Buyback Price 70% Below Stock Highs

The promoters of multinational companies who have floated buyback offers to take full control of their Indian arms seem to have got away by offering a small premium over the current market price. A look at the highs these stocks have touched over the past few years shows that the offer prices are at a 50-70 per cent discount over their recent highs.

Reckitt Benckiser, the latest multinational to join the league of MNCs with buyback offers, is offering Rs 250 a share -- a premium of 39 per cent over the Securities and Exchange Board of India's average minimum price of Rs 180 and a 17 per cent premium over Reckitt Benckiser (India)'s current market price of Rs 217 -- for the 49 per cent public holding. However, the offer price is about 50 per cent lower than the all-time high of Rs 537 recorded by the Indian unit on March 17, 1999.

 

Koninklijee Philips bought the 26 per cent public holding in Philips India, which has been saddled with losses in the last two years, at Rs 105 a share. However, the offer price was at a whopping 70 per cent discount to the Indian unit's all-time high price of Rs 355.

Similarly, Cadbury Schweppes has bought a 39 per cent stake in Cadbury India by offering Rs 500 per share -- a discount of around 30 per cent to the scrip's two-year high price of Rs 705.

Cabot UK Holdings bought out the 40 per cent stake held by non-promoters in Cabot India by offering Rs 100 per share, as against the Indian company's peak price of Rs 249 around five years back.

Sknska Ab, the promoters of Kvaerner Cementation, bought out the public stake in the company at Rs 151, which is less than 15 per cent of the all-time high price of Rs 1,135 recorded in April 1995.

Likewise, the promoters of ITW Signode got a 65.6 per cent discount on the stock's all time high price of Rs 235. Wartsila's promoters offered Rs 100 per share -- a 72.7 per cent discount over the Indian firm's four-year high price of Rs 440.