"FIs forced to favour takeovers"

HYDERABAD, April 11: Takeover bids are governed by the offer price and low holdings of promoters, IDBI executive director P V Narasimham said. Hence, financial institutions are left with no option but to adhere to changes on the economic front and even favour hostile takeovers, he added.

Institutions also have to keep the small investors’ interests in mind the IDBI executive director said. Despite having long-term investment perspectives, institutions can not continue to hold a stake in companies run by weak managements, Narasimham said.

To protect their interests, institutions are forced to support aggressive managements rather than good ones. Without referring to any company or management Narasimham said that besides maintaining a good performance, managements of companies must also be competitive in taking on global players.