Date:14/04/2004 URL: http://www.thehindubusinessline.com/2004/04/14/stories/2004041401490500.htm

Back Rane (Madras) open offer at Rs 147

Our Bureau

Chennai , April 13

THE promoters of Rane (Madras) Ltd announced today that the open offer for buying about 10 lakh shares of the company from the public would be at a price of Rs 147 per share.

The offer is being made consequent to the increase in the promoters' stake in Rane (Madras).

The increase, in turn, is happening concurrently, because the promoters are selling their stake in another group company, Rane Engine Valves Ltd.

The buyers are three companies of the group, Rane (Madras), Rane Investments and Rane Brake Linings.

As per the terms of the sale agreement, the promoters will get two shares in Rane (Madras), for every share they sell in Rane Engine Valves, plus Rs 118 per share in cash, which will be given by the three companies.

After the offers, the promoters' stake in Rane (Madras) would increase from about 43 per cent to about 55 per cent.

After this, Rane (Madras) is proposed to be split into two companies, with one company taking over all the manufacturing activities and the other, Rane Holdings Ltd, taking over all the investments.

In this way, the promoters would end up with a majority stake in the holding company.

Some analysts told Business Line that the scheme of restructure was "objectionable", because, in effect, the promoters were getting money from Rane (Madras) and the two other group companies and using that money to buy public stake in Rane (Madras).