The Pawan Ruia group has finally come out with an open offer for Dunlop India and Falcon Tyres following its indirect acquisition of these two outfits from the Jumbo group in December 2005.
The group had used a special purpose vehicle incorporated in Singapore called Wealth Sea Pte Ltd for the acquisition of Dil Rim & Wheels. DRW owns 74 per cent stake in Dunlop India and close to 69 per cent in Falcon Tyres.
The Ruia group has announced an open offer for 20 per cent in Dunlop at Rs 10 per share. The open offer for Falcon would be Rs 151 per share. The group has appointed Kolkata-based Microsec Capital as the manager to the offer. The group outfits Wealth Sea Pte and Manali Properties would spearhead the open offer, which opens on March 24.
The Securities and Exchange Board of India had directed the Ruia group to make open offers for both the companies in November. The Sebi had said in its order that the indirect purchase of shares of Dunlop and Falcon in an overseas deal had violated the takeover code.
When contacted, group chairman Pawan Ruia said the total estimated outgo of the group for these twin offers would be Rs 27.5 crore (Rs 275 million).
"We require Rs 18 crore (Rs 180 million) for Falcon Tyres and around Rs 9.5 crore (Rs 95 million) for Dunlop," he said. It may be noted the Ruia group holds a 74.5 per cent stake in Dunlop and over 70 per cent in Falcon Tyres. However, Ruia pointed out that he is not expecting a huge response from these two open offers as the shareholders are now optimistic about the future of the company.
"I do not think that we shall get a huge chunk of shares of Dunlop at Rs 10. The company is in turnaround mode and even in the last meeting shareholders were optimistic about the future. In Falcon we could get a better response considering the price of Rs 151," he added.Incidentally, Falcon stock is hovering near Rs 145-150. It has touched a high of Rs 154 on Wednesday itself.