Renaissance, together with Sanjay Bakshi, a person acting in concert and who is also a director of REL and UIL, currently holds over 16.66 lakh equity shares of Rs 10 each, representing 5.8 per cent of the equity capital in the target company.

The offer price of Rs 23 per share is higher than Rs 13.36, which is the average of the weekly high and low of the closing share prices of Gesco as quoted on the National Stock Exchange (NSE), according to a public announcement made by the manager to the offer, ASK-Raymond James & Associates Ltd to Gesco shareholders.

Gesco is also listed on the Bombay Stock Exchange (BSE). The offer, which will open on November 24 and close on December 23, 2000, is subject to necessary approval from the Reserve Bank of India (RBI) for acquisition of shares from NRI shareholders.

REL, which has operations similar to Gesco, and the Calcutta-based non-banking finance company, UIL, are controlled by the AH Dalmia group. On funding the acquisition of over 1.29 cror shares amounting to Rs 29.77 crore, the company said that it had adequate financial resources that were provided by UIL and had also created an escrow account in favour of the manager to the offer with HDFC Bank.

REL believes that the recent stock price of the target company did not reflect its true intrinsic value and is of the view that a substantial acqusition of shares in Gesco, accompanied with a change in control, would unlock the intrinsic value of the shares.

If persuant to the offer and/or acquisition of shares in any other manner as envisaged in the takeover code, the public shareholding falls to 10 per cent or below in Gesco, then REL would make a second offer to buy out the outstanding shares held by the public.