Tuesday, 15 Nov 2011
Japan’s JFE Holdings Inc is eyeing a larger chunk of JSW Steel Ltd, India’s third biggest steel maker hoping to take advantage of a steep fall in the share price and recently eased takeover norms.
According to Bombay Stock Exchange data, JFE had a 14.78% stake in JSW on September 30th
Mr Hironobu Fukushima head of corporate communications at JFE Steel Corp said that “We expect to start talking soon with JSW Steel.” But declined to elaborate.
JFE acquired a 14.99% stake in JSW in July 2010 in return for certain technology and technical assistance for automotive steel production. JSW issued 32 million shares at INR 1,500 apiece.
JFE’s Fukushima said under Japanese law, if a company acquires more than 20% of the voting rights in another company, the latter becomes an equity method affiliate of the buyer. If the second firm is an important equity method affiliate of the first, its performance must be included in the latter’s financial statements. The level of importance is decided by the acquiring company.
, he said.
This implies that if JFE considers JSW an important affiliate, it will vie for a 20-24% stake in the Indian firm, just short of the 25% open offer trigger that requires the buyer to offer to purchase more shares from the public. The previous trigger was 15%. India’s new takeover code took effect on 22 October.
(sourced:livemint)
Japan’s JFE Holdings Inc is eyeing a larger chunk of JSW Steel Ltd, India’s third biggest steel maker hoping to take advantage of a steep fall in the share price and recently eased takeover norms.
According to Bombay Stock Exchange data, JFE had a 14.78% stake in JSW on September 30th
Mr Hironobu Fukushima head of corporate communications at JFE Steel Corp said that “We expect to start talking soon with JSW Steel.” But declined to elaborate.
JFE acquired a 14.99% stake in JSW in July 2010 in return for certain technology and technical assistance for automotive steel production. JSW issued 32 million shares at INR 1,500 apiece.
JFE’s Fukushima said under Japanese law, if a company acquires more than 20% of the voting rights in another company, the latter becomes an equity method affiliate of the buyer. If the second firm is an important equity method affiliate of the first, its performance must be included in the latter’s financial statements. The level of importance is decided by the acquiring company.
, he said.
This implies that if JFE considers JSW an important affiliate, it will vie for a 20-24% stake in the Indian firm, just short of the 25% open offer trigger that requires the buyer to offer to purchase more shares from the public. The previous trigger was 15%. India’s new takeover code took effect on 22 October.
(sourced:livemint)
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