The two major financial institutions, Life Insurance Corporation (LIC) and General Insurance Corporation (GIC), holding around 27 per cent has given an outright thumbs down to participate in the AV Birla controlled Grasim Industry’s 20 per cent offer of Larsen & Tubro at Rs 190.‘‘The price is totally unattractive. Let us not talk about any kind of participation in this present offer,’’ said a top LIC official whose organisation holds 17 per cent stake, the largest stake in the cement and engineering major.While GIC and four of its erstwhile subsidiaries and UTI hold around 10 per cent and 10.34 per cent respectively. Grasim offer at Rs 190 per share MUMBAI: Grasim Industries Ltd said on Sunday it would make an open offer to buy a further 20 per cent stake in cement firm Larsen & Toubro Ltd at Rs 190 a share, a premium of 10.5 per cent to Friday’s closing price. Grasim, India’s third-largest cement-maker and the flagship of the Aditya Birla group, said its board approved the acquisition on Sunday, as required by the takeover regulations. The purchase would be carried out through Grasim and its subsidiary, Samruddhi Swastik Trading and Investments Ltd. The offer values L&T at $977.4million. It would cost Grasim and its subsidiary $195.5 million if 20 per cent of shareholders respond to the public offer. Late last year, Grasim bought about 10 per cent in L&T, the country’s number two cement producer and a leading engineering contractor, from Reliance Industries Ltd. It has since been raising its holdings through market purchases. Grasim said the open offer price was higher than L&T’s 26-week average price of Rs 174.93 on the NSE as well as the two week average price of Rs 170.08. (Reuters) The three FIs having three nominees in the L&T board have always taken a active role in any development in L&T and have also decided to chalk out a joint strategy for managing the hot issue of 20 per cent offer from Grasim Industries. The three FIs are planning to meet shortly to take stock of the latest situation. However, more than the pricing issue, the FIs are more concerned about the long term growth and development of L&T which for them has been a top performer in recent times under the leadership of A.M. Nayak. A.K. Shridhar, head of securities, UTI, said: “We have not thought about whether to participate in the open offer or not, we will take a decision later”. The select FIs are of the opinion that nothing less than what Grasim paid to the Reliance Industries to acquire 10 per cent stake from the company is acceptable to them. In one of the block deals, Grasim had paid Rs 306.60, over 40 per cent premium to the existing market value to Reliance to acquire 10 per cent.
