UltraTech to build on its India cements stake
UltraTech Cement is in advanced talks to buy India Cements’ VC and MD N. Srinivasan’s 28.42% stake in the South India-based company, increasing its shareholding to 51%, said people familiar with the matter. The move will trigger an open offer by UltraTech to buy additional stakes for an estimated `400-430 per share, about 8-15% higher than the current market price.
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UltraTech is expected to spend a total of about `7,000 crore to buy Srinivasan’s stake in India Cements and fund the mandatory open offer, the people said. A team of UltraTech’s senior officials is conducting due diligence and a formal announcement is expected within the next few days, the people said. The proposed deal is understood to have already been discussed between the two parties when UltraTech picked up Radhakrishna Damani's stake in India Cements in June this year.
«Much of the strategy on India Cements has been work in progress for a while now and there has been this comfort that India Cements had with UltraTech on their side. From N Srinivasan's succession point of view too, this buyout made good business sense. The Birla group was clear about moving swiftly on the deal given the competitive market scenario. Other interested heavyweights too have been keen on a possible deal, necessitating a swifter closure of the same,» said one of the persons cited above. Srinivasan will be 80 years old in January. His daughter Rupa Gurunath, 50, wholetime director, and wife Chitra Srinivas, director on board have no interest in running the business after Srinivasan steps down owing to indifferent health, the
