Triveni Engineering may have to exit or pay more for Sir Shadi Lal Enterprises: InGovern

livemint.com:

MUMBAI : Triveni Engineering & Industries Ltd (TEIL) may have to pay up more for acquiring a controlling stake in Sir Shadi Lal Enterprises (SSLE) than its current open offer, or exit its investment, as transaction at the current price remains unlikely, proxy advisory firm InGovern said in a report on Sunday. Triveni Engineering had made an open offer of ₹262.15 per share for acquiring a controlling stake in SSLE in January. However, the SSLE scrip, which closed at ₹156.8 on the BSE on the day the open offer was announced, has since nearly doubled to open at ₹292 on the BSE on Monday.

The share had hit a peak of ₹383.3 in February. This, after independent valuers appointed by SSLE’s board valued the company at ₹1221.7 per share. They ascribed a value of ₹800 crore to the company’s landholdings.

The publicly traded company is worth ₹154 crore as per its latest share price on the BSE. “Given the significant discrepancy between the open offer price of ₹262.15 by TEIL and the valuation per share estimated by the independent valuers of ₹1221.70 per share being four times higher, the offer price seems very low and unfair," InGovern noted in its report. “TEIL may have to sell its stake to another buyer and exit or pay a higher price to buy the share from minority shareholders," the report further noted.

Triveni Engineering did not immediately respond to Mint’s queries. The open offer by Triveni Engineering was triggered after it acquired a 25.43% stake in SSLE from one set of its promoters for about ₹35 crore. Two sets of promoters jointly owned about 61% of the SSLE’s shares.