Damanis likely to up offer price for VST

NEW DELHI, MAY 4. The Mumbai-based outfit Brightstar Investments is likely to hike the offer price `marginally' from Rs. 112 per share when its open offer to acquire 20 per cent stake in tobacco major VST Industries commences later this month.

``Brightstar is expected to revise its offer price of Rs. 112 per share marginally upwards," market sources said here without specifying the quantum of this expected hike.

Brightstar's (promoted by the Damani brothers) offer has been mired in controversy due to the alleged involvement of Mr. R. S. Damani in the recent stock market crash and has not been cleared till date by market watchdog Securities and Exchange Board of India (SEBI).

When contacted, spokesperson for Brightstar Investments, Mr. John Band, declined to comment on a likely increase in offer price, but expressed the hope that the SEBI would clear an `amended' offer letter by Brightstar by `Monday or Tuesday next'. ``We expect the SEBI to clear the offer letter of Brightstar latest by Monday or Tuesday after which the opening, closing dates will be announced," Mr. Band said.

``The SEBI wants us to put a clause in the offer letter which says that there is an investigation into many market participants, including associated concerns of Mr. R. S. Damani". Having inserted this clause, it was only a matter of days till SEBI chairman, Mr. D. R. Mehta, cleared Damanis' offer, Mr. Band said.

Mr. John Band said Brightstar representatives had been holding discussions with SEBI for the last few weeks on the wording of the offer document, and had finally arrived at a mutually agreeable wording only earlier this week.

When asked about ITC subsidiary Russell Credit's assertion that it had already picked up 2-3 per cent stake under its counter offer for VST over the last four days, the Brightstar spokesperson said this ``may not be in the interest of shareholders". ``It is foolish on the part of shareholders to take up the first available offer without waiting to fund out if the Damanis are still keen on their offer. The shareholders should wait," he cautioned.

Russell's counter offer, at Rs. 115 per share, opened on April 30 and is slated to close on May 29, but in case the Damanis come up with an offer, the closing date of the two offers will have to coincide and thus may be pushed further.

The ITC subsidiary is in the fray for acquiring 20 per cent stake in VST. Also, the London-based British American Tobacco Inc. (BAT) is the single largest shareholder in both ITC and VST. If Russel credit succeeds in picking up 20 per cent stake in VST, BAT will automatically assume control of VST, since the British major already holds 32 per cent stake in the latter.

- PTI

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