Reliance MediaWorks Ltd (RML), the Anil Dhirubhai Ambani Group company, said it is aggrieved about Fame India Ltd’s (FIL) acquisition by Inox Leisure Ltd (ILL).
That’s because, says the company, it made a counter offer at Rs 80 per Fame share when it was trading at half the price. The senior managements of both Inox and Fame, and their investment bankers were not available for comment. The only one voicing concern was Anil Arjun, CEO of Reliance MediaWorks Ltd.
“I was shocked to see that the sale was concluded at or around Rs 44-45 per share, the entire transaction was pushed through deliberately in a hasty manner,” Arjun is believed to have written in an email to Shravan Shroff, managing director of Fame India, on February 4, 2010.
DNA Money could not independently verify with Shroff whether he had indeed received a mail. A section of media reports indicated the deal price may have been softened as there was a significant proportion of debt to be absorbed by the acquiring company.
Some also indicated that flexible terms and conditions being agreed upon by both the parties (Inox and Fame) may have led to the deal going into Inox’s favour.
Countering this, a Reliance MediaWorks spokesperson asserted: “Our offer of Rs 80 per share was made after taking into account the debt on their books and our terms were flexible as well.”
While there is no clarity on the entire deal given that neither Fame nor its bankers are willing to disclose the reasons for favouring Inox, the analyst fraternity is questioning Reliance Media’s approach of publicising the letter after the deal was through.
“They are claiming that they could have bought it at Rs 80, but there’s nobody to ascertain the truth. Promoters can legally sell their stake to whoever they are comfortable with, with no binding to take up the highest offer,” said an official from a leading broking firm.
Having acquired 43.28% promoter’s equity in Fame, Inox bought an additional 7.2% from the open market last week. On Saturday, Inox through its banker Enam Securities announced its open offer to Fame shareholders to acquire up to 8,231,759 equity shares of the target company (Fame) of face value of Rs 10 each representing in aggregate 20% of the fully diluted voting equity share capital of Fame.
The offer will open on April 1 and is expected to close on April 20, 2010.
With inputs from Nitin P Shrivastava
Comments