Mumbai, India-based Standard Greases & Specialities, one of the largest private label grease manufacturers in the country, has launched an unsolicited offer for Kolkata-based Tide Water Oil Company (India).
According to a stock exchange filing, Standard Greases & Specialities made an offer to acquire 226,512 shares translating to 26 per cent of Tide Water Oil's equity. The offer price is Rs 16,632 a share, which totals to around Rs 376 crore (US$57 million).
Standard Greases is launching the offer together with Janus Consolidated Finance, Alpha TC Holdings Pte and Tata Capital Growth Fund as persons acting in concert.
Standard Greases and Janus collectively hold 24.935 per cent of Tide Water Oil's voting share capital, the filing said.
Tide Water Oil Chairman Kollal Datta said he is confident that Tide Water Oil can fend off this takeover attempt by Standard Greases. Tide Water Oil is the lubricant business of Andrew Yule, which also has Tea, Electrical Engineering, Printing, Digital Communications, etc. in its business portfolio.
According to the shareholding pattern filed with stock exchanges as of June 2015, Andrew Yule holds 26.22 per cent in Tide Water Oil. The Life Insurance Corporation has a 4.22 per cent stake in the company, while United India Insurance Company has 6.88 per cent, and Tide Water Oil Employee Welfare Trust 2.46 per cent.
Datta's confidence is backed by the support from these entities. Eighty-eight per cent of Andrew Yule is held by the government of India.
Vinod Vyas, joint managing director and founder, Standard Greases, clarified the company was consolidating its holding as its holding was at 24.93 per cent, close to the Securities and Exchange Board of India's threshold limit of 25 per cent, which would have triggered an open offer.
Though the open offer might have come as a surprise, Standard Greases has been buying into the Andrew Yule group company since 2008.
Standard Greases is a supplier to Tide Water Oil, which manufactures and markets Veedol brand of lubricants.
Tide Water Oils purchase of Veedols international trademark in October 2011 from BP paved the way for its expansion beyond India, and made Tide Water a more attractive takeover target. Standard Greases also has operations in Indonesia and in the United Arab Emirates.
Tide Water Oil has an extensive distribution network consisting of 50 distributors and more than 650 dealers servicing more than 50,000 retail outlets. The network is supplied by five lubricant manufacturing plants and 55 depots located strategically across the country.
