The board of Larsen & Toubro is likely to meet next week to discuss the cement division demerger proposal. The meeting is also likely to take up the AV Birla Group’s alternative demerger proposal. However, sources said that the L&T management has not, till date, received any formal proposal from the Birla side.Two possible scenarios seem to be emerging — one, in which a decision on the Grasim proposal is taken by the L&T board and two, the formation of a committee to study the Grasim proposal. Sebi to complete probe on Grasim-L&T soon New Delhi: SEBI will complete its investigation into Grasim’s alleged hike in stake in L&T within a few weeks. ‘‘The investigation team will submit the report in few weeks,’’ Sebi chairman G. N. Bajpai said, but declined to give any details. ‘‘Let them come out with a report, then we will apply our mind and I have given them a timeframe,’’ he said. Grasim bought 10.05 per cent stake in L&T from Reliance in November 2001 at Rs 306 per share and subsequent increase in its stake to a little over 14 per cent in tranches. Later, Grasim made an open offer for Rs 190 per share for additional shares. The company had allegedly continued its purchases, through its subsidiary, Samruddhi Investments Ltd, to take its holding beyond 15 per cent. Sebi investigation of Grasim centres around the issue of whether Grasim has acquired control of L&T. PTI The L&T management, on its part, feels that among the various proposals being currently debated, the structured demerger route, with Commonwealth Development Corporation (CDC) picking up a 6-7 per cent stake through a preference issue of convertible bonds, is the best one.Another view that seems to be emanating from the L&T side, according to industry sources, is a structured demerger, concurrent with competitive bidding by interested acquirers, including the global players, for a 51 per cent stake. This would be accompanied with an open offer for 20 per cent for the other shareholders. While the enterprise valuation under the Grasim proposal works out to Rs 4,752.8 crore with a valuation of $60 per tonne, the structured demerger proposal would see an enterprise value of Rs 6,696.7 crore with a per-tonne valuation of $85 per tonne, industry sources said.L&T’s basic argument is that under the Grasim demerger route, no shareholder would get the strategic value of $76 per tonne. Alternatively, 70.8 per cent shareholders would be able to realise either $100 per tonne, or $76 per- tonne valuation, under the structured demerger route.The L&T board will be meeting twice during the month — once to take into account the quarterly results and the other time to discuss the demerger issue. However, according to sources, the whole process may be a long-drawn one before getting resolved. Sources close to L&T feel that most cement acquisitions in the last three-four years had taken place at enterprise valuations between $80-100 per tonne, depending on debt portfolio and other factors specific to a deal. Lafarge’s acquisition of Tisco and Raymond’s cement divisions have been between $75-80 per tonne, while Grasim had paid about $92 per tonne for Dharani Cement.
