Brisk Trading In Ponds, Hll On Merger Rumour

Hectic trading was witnessed at the Ponds India and Hindus-tan Lever counters yesterday on rumours that the former would be merged into the group flagship.

About 21,000 Ponds shares were traded on the Bombay Stock Exchange, a day ahead of the companys board meeting, called officially to announce a final dividend and take stock of audited results for 1997. The scrip lost ground towards the end of the day, closing at Rs 966 against the previous close of Rs 973.25.

On the National Stock Exch-ange, nearly 23,000 shares chan-ged hands and the scrip closed at Rs 963.10 (Rs 969.20).

Brokers said speculative interest in the scrip had built over the last week in anticipation of a merger with Hind Lever. The HLL board is also meeting in Mumbai today to consider results for 1997.

 

On the BSE, HLL closed at Rs 1,378, down Rs 15.25 from the previous close, with 1.45 lakh shares changing hands. On the NSE, the scrip closed at Rs 1,377.55, down Rs 14.90 from the previous close with 2.21 lakh shares traded. Market sources said the share price was already reflecting the results and operators were unwin-ding long positions.

Ponds India is owned 51 per cent by a Unilever subsidiary in the Netherlands. Last year, the company got the RBIs permission to allow Unilever to hike its stake from 47 to 51 per cent. The merger has been rumoured ever since, which explains the long positions taken in HLL.

Market sources claim the two companies are set to announce a date for a board meeting to consider a merger, and are speculating on a swap ratio of 1:1.

The marketing and distribution set-ups of Lever and Ponds have already been integrated.