Dutch parent to hike stake in Philips, PALI

Philips has a 51 per cent equity stake in Philips India. It proposes to make an open offer for an additional 23 per cent of the total equity which, if subscribed fully, will enhance its holding to 74 per cent in Philips India. The offer price of Rs 105 per share offers a premium of 46 per cent over the closing price of Philips India on the Bombay Stock Exchange on October nine, 2000 and a premium of 55.5 per cent over the Sebi mandated price.

Philips also has a 51 per cent equity stake in PALI and another 23.5 per cent is held by Philips India Ltd. The open offer is for the balance outstanding equity of 25.5. The offer price of Rs 95 offers a premium of 96 per cent over the closing price of PALI on the Bombay Stock Exchange on October nine 2000 and a premium of 81.5 per cent over the Sebi mandated price.

PALI predominantly supplies lighting products to Philips India. The present shareholding pattern combined with the subscription to the open offer is expected to lead to the de-listing of PALI.

Philips has reached the conclusion that Philips India Ltd requires better focus, more flexibility and greater commitment from Philips in terms of resources, technology and new products. To justify a greater commitment, and to provide an opportunity to the public shareholders to make an appropriate choice under the prevailing market conditions, Philips has decided to make this open offer.

According to a Philips spokesperson, India remains a very important strategic market for us and the challenges we are confronted with will be better met with increased shareholding in Philips India. “The share premiums offered are attractive and in line with what market has come to expect from such open offer exercises,” he said.