SEBI to give final view on Takeover Code later this month

As per the takeover guidelines proposed by a SEBI panel headed by C Achuthan in July last year, an entity buying 25% stake in a company will need to make an open offer to the rest of the shareholders

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) is likely to give its final view on the Takeover Code for merger and acquisition deals at its board meeting scheduled later this month, reports PTI.

"We are in consultation process. Probably we will get it (Takeover Code) through in the next board meeting," SEBI executive director Usha Narayanan told reporters on the sidelines of an Assocham event here.

As per the takeover guidelines proposed by a SEBI panel headed by C Achuthan in July last year, an entity buying 25% stake in a company will need to make an open offer to the rest of the shareholders.

Under the existing norms, the trigger point for making an open offer to shareholders was acquisition of 15% equity in the target company through market operations or through a negotiated deal.

SEBI had sought comments from various stakeholders on the Achuthan report.

"The two issues that got maximum feedback are relating to non-compete fee," Ms Narayanan said.

In his report, Mr Achuthan had recommended abolishing non-compete fees to be paid by acquirer to the promoter of the target company.

In mergers and acquisition deals, a non-compete fee is paid by the acquirer to the promoters of the target company for not entering the same trade, and such payments could be as high as up to 25% of the deal value.

If the report of the SEBI takeover panel is accepted by the regulator, the open offer would be available to all shareholders.

The proposed new norm of making an open offer for 100% stake would give all shareholders an opportunity to exit the company and get fair price for their equity stake.

At present, the open offer is for 20% of the share capital.

The Achuthan panel was set up in September 2009 with the aim to provide guidelines that will shape acquisitions in India for the next 5-10 years.

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Rhodia acquires PI Industries’ engineering plastics business

French firm Rhodia has completed the acquisition of the engineering plastics business of Rajasthan-based diversified firm PI Industries at an undisclosed amount

French firm Rhodia today said it has completed the acquisition of the engineering plastics business of Rajasthan-based diversified firm PI Industries at an undisclosed amount.

"We received an enthusiastic feedback from both PI Industries and Rhodia's customers and suppliers regarding this strategic move," Rhodia Engineering Plastics president Francois Hincker said.

"All our international partners in the region as well as domestic Indian players are fully confident in our ability to accelerate their growth through a rapid expansion of our activity," Hincker said.

This acquisition is a major step in Rhodia Engineering Plastics' growth ambition in India, aiming at doubling its local production capacities to represent 15% of Indian polyamide compound market by 2015, he said.

Rhodia plans to triple the capacity of PI Industries to 18,000-tonnes per annum from present 6,000-tonnes per annum by 2015.

"India has a huge growth of potential in plastics and we want to tap the opportunity. We are confident to grow with PI Industries in India," Hincker said.

The BSE-listed PI Industries operates three business units, agri inputs (manufacturing and distribution of agro chemicals-pesticides, insecticides and herbicides), custom synthesis (custom synthesis in the areas of fine chemicals, agro chemicals and pharmaceutical intermediates) and PI Polymer (engineering plastics compounding for end-use in automotive, electricals and home appliances).

On Wednesday, PI Industries ended 0.83% down at Rs725 on the Bombay Stock Exchange, while the benchmark Sensex increased 2.25% to 19,696.86.

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Hexaware wins multi-million dollar deal

Hexaware Technologies has signed a contract resulting in $10-$15 million revenues annually with an existing client in the US

Hexaware Technologies, a global provider of IT, BPO and consulting services, today announced that it has signed a contract resulting in $10-$15 million revenues annually with an existing client in the United States.

Under this deal, the company will be offering IT services to support the client's banking and investment management business. Hexaware has a long standing relationship with this large and well established financial services firm head-quartered in the United States. In addition to its traditional offerings in application development and support, Hexaware will also offer remote infrastructure management services (Remote IMS) to this client.

As a part of the core strategy; Hexaware deployed dedicated client partners and an engagement director at its key accounts. In addition, the vertical structure has enabled greater cross-sell of all major horizontal service lines in to such accounts. Having executed this deal, the company expects to generate revenues worth $10-$15 million annually from 2011 onwards from this BFSI client which was just a one-million dollar client for Hexaware in 2009.

"While we have already demonstrated our leadership position in the asset management micro-vertical, we have now proven our strong capabilities in our horizontal service lines to this customer. We are further providing value to the customer by offering all these services utilising our major global delivery centers in the US, Mexico and two centers in Chennai & Mumbai", said PR Chandrasekar, CEO and vice chairman, Hexaware Technologies.

On Wednesday, Hexaware ended 3.42% up at Rs72.60 on the Bombay Stock Exchange, while the benchmark Sensex increased 2.25% to 19,696.86.

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