Swedish Match makes open offer to buy Wimco stake

MUMBAI, Dec 17: Multinational Swedish Match has made an open offer to buy 20 per cent of equity at a price of Rs 35 per share in Indian mat...

MUMBAI, Dec 17: Multinational Swedish Match has made an open offer to buy 20 per cent of equity at a price of Rs 35 per share in Indian match firm Wimco Ltd.

The takeover bid is being made by Plash Foods, AVP Trading Pvt Ltd and Swedish Match Singapore (SMS) to acquire 59,73,641 shares from the market. The offer is being made in keeping with the SEBI’s takeover regulations, following SMS takeover of 62 per cent stake in Haravon Investments Pte and Seed Trading Pte which hold 38.61 per cent stake in Wimco.

The promoters of Haravon Investments and Seed Trading-RK Jatia and RGN Swamy also own Plash Foods and AVP Trading. The offer opens on February 2 and closes on March 4.

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As per an agreement entered into between the parties, SMS is taking control of Haravon and Seed by acquiring a 62 per cent stake of Jatia and Swamy in each of these companies. Thus, SMS acquires control over the 38.61 per cent in Wimco. It will be controlling the management of Wimco jointly with Jatia and Swamy.

The share purchase agreement provides that Jatia and Swamy will acquire upto 24 per cent of Wimco including by means of an open offer of 20 per cent to the public.

According to JM officials, the offer has not been made directly by the Swedish Match as the shareholding ratio of 2:1 is proposed to be maintained between SMC and the current promoters. Wimco’s current promoters want to hold 30 per cent stake in Wimco. Only in case the response to the open offer is for less than 20 per cent, the Jatias will offer the difference to SMC.

But this is not likely to happen considering the state of affairs at Wimco.On completion of the offer, Jatia and Swamy will further transfer one per cent of the equity capital of Haravon and Seed to SMS for every 1,89,500 shares of Wimco acquired by them through the open offer. This transfer will take place at a consideration arrived at by valuing the holding of Haravon and Seed in Wimco at Rs 35 per share.