Seven Bids Made For Swc Consumer Division

About seven bids have been made for buying up the Rs 42-crore consumer products division of Shaw Wallace and Company (SWC) Ltd. Key consumer products companies, including Hindustan Lever Ltd (HLL) and Henkel, are in the running for acquiring the business.

Sources said the initial bids submitted by the consumer product giants were now being evaluated by the company. The entire process is expected to take about two more months. A SWC spokesperson declined to either confirm or deny queries related to the bids.

On April 15, the Manu Chhabria-controlled company invited bids to buy majority stake in companies engaged in manufacture and sale of soaps and detergents held directly or indirectly by SWC and certain assets and liabilities of its consumer products division.

 

Prudential Capital Markets Ltd is the manager to the bids.

The bidders had to formally execute a confidentiality agreement around the time of submitting the offer. The last date for submission lapsed on May 2.

The consumer products division includes Calcutta Chemicals Company, Detergents India Ltd as well as brands such as Margo, Neem, Aramusk, Chek, Tuhina, etc. Most of these brands still command considerable brand equity.

According to sources, the next phase would be to select from among the initial bids, the ones which would be considered further.

Thereafter, a shortlist from among them would be drawn up for further negotiations.

The shortlisted ones would, according to sources, be given access to the books of the companies up for sale and be introduced to their various internal facets. "The company would share the details with the shortlisted bidders obviously on the condition of utmost secrecy,'' a source told Business Standard.

Thereafter, revised detailed bids would be submitted by the bidders and the final decision would be taken by SWC.

Sources said the pricing obviously would be a key consideration, more than the identity of the bidder, most of whom are corporate heavyweights. Henkel, for instance, has been in the race to acquire the consumer products division and companies for quite some time.

The proposed sale is crucial to SWC, which has just drawn up a financial plan to ease its burden and pay off its dues to the creditors.

The plan, drawn up by Company Law Board nominee on the SWC board, L C Gupta, envisages raising money by sale of certain assets and the rest by infusion of funds.