When contacted BSES acting chairman and managing director SS Dua, who was in New Delhi told FE: We are supporting the RIL offer.
Meanwhile, a statement signed on behalf of Mr Dua said: We strongly support Reliances open offer for BSES. RIL is already the largest shareholder in our company, with nearly 44 per cent stake. It added: Considering RILs consistent track record of superior operational and financial performance, we are confident that BSES will rise to new heights under its management control, leading to enhancement of overall value for all BSES stakeholders, five million customers and nearly 1.40 lakh shareholders.
The BSES managements response is in sharp contrast to Larsen & Toubro (L&T) managements stand to an open offer announced for an additional 20 per cent stake in L&T by Grasim Industries.
One bone of contention was the pricing of the issue, which the financial institutions felt was lower than that paid by Grasim to make an entry. Ironically, Grasim did not even ask for management control of the company at the time of announcing its offer to L&T shareholders.
On Friday, Reliance announced an open offer for 20 per cent of BSES at a price of Rs 230.10 per share. BSES has convened a board meeting on December 25 its first after the Reliance group announced an open offer to discuss the offer as a priority among other items on the agenda.
In addition to its current two nominees, Reliance plans to induct more members on the board of BSES after it gains management control of the company.
The Reliance group intends to accelerate BSESs growth plans to implement its vision of achieving leadership in the power sector. In its public announcement to shareholders of BSES, Reliance has hinted at a restructuring and reconstruction and streamlining of various operations of BSES.
However, the success of the second open offer by Reliance for BSES may no longer be crucial for the company. The Reliance group may end up getting management control of BSES Ltd, even if very few shares are tendered in the offer. The offer has been made with an aim to clearly stake a claim for control of BSES, in which Reliance has had an interest for almost 14 years.