Mumbai, Oct 30: Imparting a fresh twist to the ongoing takeover battle, the AH Dalmia group, which has launched a hostile bid for Gesco Corporation, is now lining up another aggressive gameplan to acquire control of the company, and is talking to Foreign Institutional Investors (FIIs) to acquire their holdings at an eventual offer price set by it, which can be the current offer price of Rs 27 or higher. This strategy is aimed at ensuring that the FIIs come to them with their holdings whatever the counter-bid, if any, from the Gesco promoters, is.Confirming this, Mr Abhishek Dalmia of Renaissance Estates, which has made the offer, told The Financial Express on Monday that the response from the FIIs has not been negative to this move. The gameplan attempts to capitalise on the fact that contingent contracts are allowed under the law, and if they strike the deals with FIIs now, it gives the Dalmia group a distinct advantage, despite the fact that the Sheths have not put in a counter-offer yet. The Dalmias, through Renaissance Estates Ltd together with Sanjay Bakshi, has already picked up 10.4 per cent in Gesco Corporation. FIIs have 10 per cent in Gesco Corporation.
"We are telling them that we are ready to buy their holdings at an eventual offer price, which can be Rs 27 or more", Mr Dalmia explained. The Sheths' deadline for making a counter-offer expires on November 11, and the stock market is keenly awaiting a move from the Gesco camp. The idea behind trying to get into contingent deals now is to sew up purchases even before a counter-offer is made. But there is no decision on what maximum price the Dalmias are ready to offer.
Mr Dalmia, who was in Mumbai on Monday, said there was no immediate hurry for the Dalmia group to increase their offer price, despite the share price increasing from Rs 27 levels. The Dalmia group, he said, would prefer to wait till the counter-offer is made by the Gesco promoters before deciding on its next course of action.
However, the Dalmia camp also appears to be keeping a close watch on the share price movement which, despite market rumours of the Gesco promoters' likelihood of a Rs 50-level counter-offer, the share price did not seem to shoot up as much as expected. On Monday, the stock touched a high of Rs 39.
The Dalmia group says they may consider moving the Securities and Exchange Board of India (Sebi) at a later stage in case no counter-offer came, to find out whether there was any manipulation of the price in trying to keep the market price above the Dalmias' offer price.
"Regulatory intervention may be necessary to look into the price angle in case no counter-offer comes", Mr Dalmia said.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.