Khaitan to buy out Williamson Tea

The B.M. Khaitan group has formally announced its decision to buy Williamson Tea Assam Ltd (formerly George Williamson Assam Ltd) at a total cost of £21.35 million (Rs 168.67 crore).

McLeod Russel India Ltd (MRIL), the group’s bulk tea company, is executing the acquisition through a global arrangement, picking up a majority stake in Williamson Tea. This buyout will be effected through a 100 per cent share capital buy of Borelli Tea Holdings Ltd, UK, from Williamson Tea Holdings Plc, London, which in turn holds 70 per cent of Williamson Tea Assam.

The agreed purchase price for 70 per cent of indirect shareholding of Williamson Tea imputes a value of about Rs 170 per share. This price includes a fee for non-compete arrangement in the Indian tea industry of about Rs 30 per share in terms of Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Consequently, MRIL along with its associates proposes to launch an open offer to acquire up to 20 per cent fully paid-up equity share capital of Williamson Tea. ICICI Securities is advising MRIL on the transaction.