Even as infra major L&T makes significant advances in a bid to take control of Mindtree in what could be India’s first ever hostile takeover in the IT industry, other industries including cement, textile space and FMCG have witnessed hostile takeover attempts in the past. Notably, in a board meet scheduled today, Mindtree is mulling a share buyback program to stave off L&T efforts of a hostile takeover. We take a closer look at three hostile takeover attempts made in Indian corporate history.
Swraj Paul’s attempt on Escorts, Delhi Cloth Mills
In 1983, London-based industrialist Swraj Paul picked up stake in Delhi-based firms Escorts and Delhi Cloth Mills under a new scheme that allowed NRIs to invest in Indian companies. Notably, when his shareholding became greater than that of promoters, Indian business houses sought the support of Pranab Mukherjee, the then Finance Minister. Ultimately, the matter reached Parliament, and the government eventually convinced Paul to sell his shares back to the promoters, the H P Nanda family (Escorts) and the Shri Ram family (DCM). Finally, Swraj Paul retracted his bid to take control of the firm.
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India Cements buys out Raasi Cements
In 1998, India Cements successfully made a hostile takeover bid for Raasi Cements (RCL) with an open offer for the latter Rs 300 apiece, significantly above the then prevailing share price of Rs 100 on BSE. Later, the promoters ie Secunderabad-based Rajus tendered their shares, and the firm further bought out the FIs in the open offer and successfully increased their holding in the firm to 85%.
Emami- Zandu case
Another hostile takeover attempt is from the FMCG space when Emami Ltd picked up a 24% stake in Zandu from its promoters Vaidyas (co-founders) at Rs 6,900 per share. The move triggered an open offer for 20 per cent stake. Finally, the Parikh family sold its stake and Emami concluded India’s first hostile takeover in many years. All in all, Emami ended up paying Rs 750 crore for a 72% stake in Zandu, gaining effective control.
