INEOS set for extra 20% in India's Lanxess ABS

08 February 2008 17:30  [Source: ICIS news]

NEW DELHI (ICIS news)--UK-based chemical group INEOS is expected to proceed with its pending public offer for an additional 20% stake in Lanxess ABS Limited (LAL) following regulatory clearance on Friday, analysts said.

Indian stock market regulator Securities and Exchange Board of India (SEBI) issued its statutory order waiving the demand from some LAL shareholders last year for an increase in the public offer price after the offer manager SBI Capital Markets contested the proposal.

SBI is now expected to issue a revised schedule in the coming days for the IPO, which was expected to close last September.

Unspecified shareholders had demanded that "non-compete" compensation payable by INEOS to Rakesh Agrawal group (RA Group), Indian co-promoters of LAL, should be included in the public offer price of Rs201/share, thus increasing it to Rs251.03/share.

Under takeover regulations, an acquirer of a stock exchange-listed company is required to make an offer to public shareholders to buy 20% shares from them at the same price at which it bought the controlling stake from existing promoter.

But SEBI said that INEOS' non-compete compensation amounted to 24.88% of the offer price - within the 25% ceiling.

RA Group signed an agreement last July with INEOS ABS to sell its 19.04% stake in LAL at a price of R201/share, aggregating to a total payment of Rs242.57m ($6.1m)and providing for additional non-compete compensation of Rs165.32m to RA Group.

Lanxess India Private Limited (LIPL) had also agreed to sell its entire 50.97% stake in LAL to INEOS ABS at a price of Rs196.36/share.

This followed Germany producer Lanxess's decision to sell acrylonitrile butadiene styrene (ABS) to INEOS in two phases over two years.

($1 = Rs39.61)

By: Naresh Minocha
+65 6780 4359

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