Pyramid Saimira Theatre Ltd is seriously facing a hostile takeover threat. With the co-promoter Nirmal Kotecha said to have sold his entire stake of little over 24% in the open market in the last one month or so, the main promoter?s (PS Saminathan, CMD of the company) chance of consolidating his stake appears to be bleak and the stage is wide open for a possible hostile takeover by rivals (could be a single company in this case), said sources close to the development here.

Caught unaware of the recent income tax problems coupled with a huge loss incurred out of Rajani-starrer ?Kuselan? late last year, the company is looking at various options including approaching private equity players to not only help it tide over the current crisis but to safeguard itself from any hostile takeover, said the sources. It is believed that the company is facing a takeover threat from a leading business group, which has major interest in telecom, entertainment and power, and, said to be the purchaser of majority of Kotecha?s 24% stake.

The promoters have even failed to recover their pledged shares of little over 6% with the financial institutions, which in turn were sold by financial investors (FIs) in the open market, thereby left with a shareholding of 17.8% now as against over 24% a month ago, the sources added.

It may be recalled that the company had recently hit the headlines when it went public with an allegation that a missive purportedly sent by market watchdog Sebi directing its promoters to make an open offer for an additional 20% stake in the company at a price of Rs 250 a share has been forged by some operators to manipulate its stock price. PS Saminathan also went on record saying that he would buy out his co-promoter Kotecha’s stake in the company through off-market deals.

When contacted PS Saminathan, chairman and managing director of Pyramid Theatre, said, ?Yes, we are in danger. There is a possibility for a hostile takeover. There are a lot of things happening now. We are talking to our lawyers and advisors on how to go ahead with the situation.?

?We had to forgo part of our promoters? holding to safeguard the interest of the company as well as to maintain our credibility with the bankers from whom we have taken short-term loans. We believe that the same bankers will help us to raise at least Rs 100 crore to tide over the ongoing business requirements while shoring up our stake further in the company,? he added.

When pointed out the co-promoter?s complete exit out of the company, he said, ?We could not make it to the time schedule of our co-promoter who in turn had to sell his entire holding in the open market in tranches. However, we have a breathing time and we will consolidate our stakes further by purchasing in the open market.? ?If the situation warrants, the promoters will approach private equity players to become our partners to avert any hostile takeover,? he said.

The promoters are even willing to sell their assets even at a lower price for retaining the credibility of the organisation, he added.

Facing threat

• Nirmal Kotecha sells entire stake in open market

• Saminathan?s chance of conso-lidating stake appears bleak

• Stage open for possible hostile takeover by rivals

• Promoters fail to recover pledged shares