MUMBAI, Nov 25: Sandvik AB is proposing to hike its stake in Sandvik Asia Limited (SAL) to 75 per cent. For the purpose, it is making an unconditional open offer to acquire by tender upto 20.41 per cent shares of SAL at a price of Rs 1800 per equity share of face value Rs 100.

As per the public announcement for the offer, the objective for acquisition of the shares is that Sandivk wants to introduce its proprietary technology and know-how to SAL. But for this, it wants to have at least 75 per control over SAL. Currently it has a 54.59 percent stake in SAL. Sandvik considers this level of control necessary to protect its proprietary technology. As things stand, Sandvik operates throughout the world with full or near control over its subsidiaries, in order to protect the considerable investment it has made in the technology.

Incorporated in Sweden, Sandvik AB is the world's leading manufacturer of tools and tooling systems for metal working. The present subscribed equity capital of SAL comprising of 18,56,984 fully paid-up equity shares of Rs 100 each aggregating to Rs 18,56,98,400. The public holds about 25 per cent stake while institutions led by UTI hold around 10 per cent. The offer price is higher than the average of the weekly high and low of the closing prices of SAL on the NSE and BSE for the 26 weeks preceeding November 14.

While Sandvik has already obtained permission from the Ministry of Industry for increasing its stake to 75 per cent, acquisition of shares under the present offer is subject to necessary approvals from the Secretariat of Industrial Assistance, GoI and the RBI. The Hongkong & Shanghai Banking Corporation has issued a bank guarantee in favour of the manager to the offer (HSBC Capital Markets) for a sum of Rs 210 million, being over 25 per cent of the total consideration payable under the offer.

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