Mumbai: Grasim Industries has finalised the revised timeline for its open offer to acquire 20 per cent more of Larsen & Toubro. The offer is scheduled to open on 7 May 2003, at the original price of Rs 190 per share, and will close on 5 June 2003.

The open offer was originally scheduled to open on 9 December 2002. But the Securities and Exchange Board of India (Sebi) had put on hold Grasim's offer due to the alleged violations of the takeover regulations by Grasim and inadequate disclosures while making a public announcement.

The offer price was way below the acquisition price of Rs 360.60 per share that Grasim paid to Reliance Industries in November 2002, for a 10-per cent stake in L&T. There were strong protests from groups like the Investors' Grievances Forum about the small investors being shortchanged. Sebi has since withdrawn restrictions on the company to acquire any further equity shares of L&T.

However, an appeal against the Sebi order is pending with the Securities Appellate Tribunal. The next hearing of this case is fixed for 6 June 2003. Grasim Industries had earlier said it would pay Rs 130 per share for taking control of a cement company that may be formed by splitting L&T.

Grasim had also valued L&T's remaining business at 162.50 per share, which along with the cement unit's valuation, works out to a total equity value of Rs 292.50 per share for L&T. But, Grasim also clarified that it had arrived at an offer of Rs 130 per share for any demerged cement unit based on limited published information and it could change the price if further details or subsequent developments warranted it. However, L&T was offered around Rs 285 per share by CDC Capital Partners to pick up stake in the engineering and cement conglomerate.

CDC had proposed to invest in convertible bonds, which can be converted into equity shares at any time until December 2004 at its option. The proposal has some tough conditions, including an option to not only sell its entire equity stake after December 2007 but to also force L&T's management to sell about 44 per cent (51-per cent stake together with CDC's stake) in the cement entity. CDC proposes these rights, called drag along rights, to safeguard its interest in the cement entity.

Likewise, CDC has insisted on rights to sell its stake if L&T decides to offload shares through the secondary route between 2004 and 2007. According to this plan, CDC will get a 6.8-per cent stake, shareholders will get a 23.2-per cent stake and L&T will have 70 per cent in the demerged entity.

Grasim's open offer to acquire an additional 20 per cent stake in L&T has been put on hold pending a Sebi investigation. Grasim's open offer followed its acquisition of a 15-per cent stake in L&T.