Dalmia counter-offer for ITW Signode unlikely

Our Corporate Bureau

Mumbai, Aug 28: THE Kolkata-based MS Dalmia group is understood to have decided against coming with a counter-offer for acquiring stake in ITW Signode India Ltd.

This puts an end to market speculation that the acquisition of 11.48 lakh shares of ITW Signode by MS Dalmia (taking his stake to over five per cent), would be followed by a counter-offer. However, officials of the Dalmia group could not be contacted for comments.

The US-based Illinois Tool Works (ITW) had announced the open offer at Rs 80 per share, for acquiring 49 per cent stake in the Indian subsidiary ITW Signode India Ltd.

Following rumours of the counter-offer, the market had also expected an upward revision in the open offer price, as market players felt the current offer is underpriced and instead, it should be around Rs 100 per share. ITW has made this offer to acquire 100 per cent shares of the company and delist its Indian operations.

However, the offer is conditional to the extent that the US parent has the right, but not the obligation to purchase the shares, in case the number of shares tendered falls below 29 per cent of the share capital.

On the other hand, if, as a result of the offer, the public shareholding drops below 10 per cent, the company will be delisted, as per the open offer statement. ICICI Securities & Finance has been appointed as manager to the offer. ITW Signode is the country’s leading end-of-line packaging solutions and offers customer-specific packaging solutions and dedicated service support in areas like aerospace, metals, automobiles, FMCG, white goods,
petrochemicals and pharmaceuticals.