MUMBAI, May 3: The takeover battle for Indian Aluminium (Indal) is hotting up. After the announcement of Canada-based Alcan Aluminium - the major shareholder in Indal - about revision of its offer price for Indal shares to Rs 120 per share last week, Sterlite Industries has initiated moves to jack up its offer price for Indal to around Rs 130-135 per share.``Now that we have come so far, we are ready to go even further,'' sources in the Sterlite camp said. However, much will depend on the approach of financial institutions which hold nearly 36 per cent stake in the company. Sterlite has already approached institutions for buying out the latter's stake in the company. It is learnt that institutions are demanding a higher price for Indal shares.The India Cement-Raasi Cement takeover episode has clearly unnerved institutions. FIs who were supporting the Raasi promoter till the last minute were surprised by the Raasi promoter B V Raju's decision to sell his stake to the raider India Cement. ``FIs don'twant Raasi to be repeated in the Indal case. FIs missed an opportunity to sell Raasi shares at a high price when they sat on the India Cement offer,'' said a merchant banker.In fact, both Alcan and Sterlite had several rounds of talks with FI officials. Neither the FIs nor the Finance Ministry had shown any preference for any of the offers so far. ``We believe that majority shareholding in the company will help us ensure the company's stability and steady growth and assist Indal in reaching its objective of becoming more globally competitive,'' Suresh Thadani, chief financial officer, Alcan, had said while announcing the higher offer price last week.For Sterlite, takeover of Indal will be a prize catch. Indal had clocked a turnover of Rs 1,162 crore during the year ended March 1998. The takeover route makes sense as setting up a greenfield project involves huge capital expenditure. Alcan, on its part, wants to be associated with the company and has expressed its intention to hike its stake in thecompany to 51 per cent.It may be recalled that Alcan had earlier offered Rs 105 per share in response to Sterlite's offer of Rs 90 per share for 20 per cent stake in Indal. Sterlite had subsequently hiked its offer to Rs 115 per share in third week of March. Both the Alcan and Sterlite offer will open on May 4 and close on June 2.The offers were originally scheduled to open on April 18, but the Securities and Exchange Board of India (SEBI) delayed the clearance to their letters of offer. SEBI had asked Sterlite to provide the guarantee that no funds raised through foreign debt offerings would be utilised for Indal aquisition. As Sterlite finally agreed to comply with this condition, SEBI cleared the letters of offer last week.Alcan's application to the Foreign Investement Promtotion Board (FIPB) for increasing its stake in Indal to over 51 per cent from 34.5 per cent is slated to heard on May 8 in New Delhi. The FIPB had last week decided to refer the matter to the core group of secretaries. Itscontention was that it was an unusual case which must be thoroughly clarified.If Sterlite revises its offer price once again, it will be the third price revision by the former. The questions doing the rounds in corporate circles is: will Alcan again hike its offer price? Will the price war between the two parties continue?The Department of Telecommunication had recently decided to pay Rs 100 crore to Sterlite for an order executed two years ago. This payment is expected to help Sterlite in the takeover battle. Alcan, on the other hand, is considered as a multinational with a deep pocket.Both the parties are waging the war on all possible avenues. Sterlite had opposed Alcan's open offer arguing it violated government regulations that a foreign company can not make such offer without securing permission either from the Reserve Bank of India or FIPB.
