This story is from November 30, 2007

DCM fight: HB revises offer price

TNN / Nov 30, 2007, 00:39 IST

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The battle on the issuance of warrants to promoters took a new turn with HB Stockholdings requesting the management of DCM Shriram Industries to make a rights issue at Rs 120 per share.

NEW DELHI: The battle on the issuance of warrants to promoters took a new turn on Thursday with HB Stockholdings requesting the management of DCM Shriram Industries to make a rights issue at Rs 120 per share.
HB Stockholding said in case the issue was not fully subscribed, it will subscribe the unsubscribed portion.
DCM Shriram Industries has issued warrants to promoters, which can be converted into 21 lakh shares at Rs 90 per share.
The promoters are also ready to pay the entire amount upfront. Initially, the company had issued warrants at Rs 52 per share.

But because of the opposition from shareholders, it later revised the offer.
HB Stockholding has also revised the open offer price to buy 35 lakh shares from Rs 97.50 to Rs 120 per share. Chairman of HB Stockholdings Harish Bhasin said the book value of company's share is around Rs 115. He said the rights issue will protect interests of shareholders and the company.
If at all the company plans for warrants, it should call an Extraordinary General Meeting (EGM) of shareholders to get the resolution passed, Bhasin said, adding that decision on such an important thing should not be taken via postal ballots.

Bhasin said issuance of warrants is detrimental to the interest of common shareholders. HB Stockholding has already moved to High court against the decision of CLB, which rejected its plea to restrain DCM Shriram from issuing to promoters.
Bhasin said his open offer does not aim at acquiring the company but to highlight the point that current share price offered by the promoter is undervalued. If warrants are issued at Rs 90 per share, common shareholders will be looser.
Therefore, he requested the company's management to go for right issue at Rs 120 per share instead of giving warrants to its promoters at Rs 90 per share.

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