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December 22, 2015

Volume 7 Issue 3

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Ministry Intervenes in Tide Water Bid

India’s Finance Ministry asked two state-owned insurance companies with stakes in Tide Water Oil not to participate in Standard Greases and Specialities’ bid for a majority stake of Tide Water.

Standard said it will not be deterred by the ministry’s intervention.

“It will not make any difference, and the open offer process will go on,” Standard Greases’ Director Ketan Vinod Vyas told Lube Report Asia. Vyas declined to comment further, citing rules against discussion of such campaigns while they are ongoing.

On Sept. 22, Mumbai-based Standard Greases, in cooperation with Janus Consolidated Finance Pvt Ltd, Alpha TC Holdings Pte Ltd and Tata Capital Growth Fund, announced an open offer to pay up to Rs 377 crore (Rs 3.77 billion or U.S. $57 million) for 226,512 shares of Tide Water stock – enough to give it majority control of the Kolkata-based company. Standard Greases later increased the per-share price of its offer so that the overall value of the bid now stands at Rs 397 crore.

Standard Greases and Janus already own 24.93 percent of Tide Water. Tide Water’s promoter, state-owned Andrew Yule, which opposes Standard Greases’ bid, holds 26.22 percent. The state-owned insurance companies, Life Insurance Corp. and United India Insurance, own 4.22 percent and 6.88 percent, respectively. Retail investors own 24.32 percent.

It is not known yet whether the insurance companies will follow the ministry’s request to abstain. Standard Greases’ offer closes Dec. 30.

Priyank Chandra, research analyst with Dolat Capital Market, said the combined 11 percent stake held by the insurance companies could create hurdles for Standard Greases if they choose to abstain, but it’s too early to arrive at a conclusion.