Its Not A Hostile Bid

It was an open secret that the Reliance group has been eyeing BSES. But the timing of the open offer caught the BSES management offguard. In an interview, BSES chairman and managing director R V Shahi told Ravindran that he has no problems taking Reliance on board.

Q. How do you view this offer?

A. It is not a hostile takeover. It is a matter to be decided by the shareholders of the two companies. Obviously, some of them will be keen on availing of this offer.

Do you expect a counter-offer ?

Who will make a counter-offer?

Enron perhaps, or some multinational?

 

I don't think that Enron has the right credentials. I am not well informed on the exact legal position. I understand that it is easier for an Indian company to make counter-offers.

Will the professional management of BSES request the FIs to oppose the offer?

There is no question of doing that. If Reliance becomes the largest shareholder in BSES, we will take all major decisions in consultation

with them just as we consult the FIs now.

Besides, even if Reliance becomes the largest shareholder, BSES will continue to be professionally managed. The Ambanis also believe in professional management as is evident in their own companies. If they did not believe so, it would have been a matter of some concern.

What about the financial institutions who are the largest shareholders in BSES? Do you have any idea about their stand?

I have no inkling on their stand.

The offer price of Rs 234 per share is below the market price. What is the valuation of BSES?

We have not got any formal valuation done. However, the BSES scrip has appreciated in the last one year from Rs 160 to Rs 255. We are ahead of other power sector stocks. It is all a question of how the market perceives it.

Has the timing of the open offer taken you by surprise?

Yes, I was in Delhi when I heard about it. Such rumours have been doing the rounds for many years now. Initially, I treated it as just another rumour. Later on my office informed me that in fact this time it was correct.