Redington India?s step-down overseas subsidiary Redington International Holdings? acquisition of Arena Bilgisayar Sanayi ve Ticaret AS, Turkey (Arena), has run into rough weather with an investor contesting its move to wrap up the buyout without going in for mandatory tender offer (MTO).
RIHL had announced in November that it acquired 49.4% stake in Arena for consideration of $42.4 million and had set in motion the process of buying out the remaining stake. Contesting its move, an investor had filed an application with the Capital Markets Board (CMB), Turkey, requesting a directive to be issued RIHL to launch an MTO for taking over the remaining stake in Arena.
According to a regulatory filing with stock exchanges by Redington India, the CMB decided to turn down this request after which the investor approached a court, 13th Chamber of the Council of State, Turkey.
The court subsequently granted a stay of execution on CMB?s decision to decline the request for an MTO. Pursuant to the stay, CMB has sent a communication to RIHL requiring it to either file an application for launching a MTO to acquire the balance shares in Arena or make a request seeking exemption from making such a tender offer.
R Srinivasan, MD, Redington India, said, ?There is no legal tangle. We have been told by CMB that there was no need to go for an open offer as there were clear clauses in the their guidelines. Now that CMB has asked us to have a re-look, we will be appealing to the court stating our position that the open offer was not necessary.?
The filing said, ?This investment by RIHL was made under the applicable laws, which as per legal advice received by us do not require a MTO to be made.?