Investors mull 30% Cadbury premium

Ernst & Young had recommended a 30 per cent premium to the company's valuation.

The Bombay High Court has asked Cadbury India and minority shareholders to consider by July 5 the recommendation given by Ernst & Young for a 30 per cent premium to the company’s valuation than what had been fixed by two independent valuers earlier.

Counsel for Cadbury Janak Dwarkadas as well as Counsel for shareholders Pradeep Sancheti would now inform the High Court on July 5 their views on the recommendation.

The High Court-appointed Ernst & Young had submitted on June 10 a report in a sealed cover to the High Court recommending a 30 per cent premium to the company’s valuation.

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Hearing an application filed by Investors Grievances Forum,a body for protection of small investors,Justice S J Kathawala,on 15 April,had asked Ernst & Young to independently value shares of Cadbury India whose promoters have proposed to acquire 2.5 per cent minority shareholding.

Cadbury shareholders had opposed valuation of shares based on a report prepared by Valuers M/s Bansi Mehta and Co and M/s SSPA and Co,which arrived at Rs 1340 per share.

According to IGF,the company has proposed share capital reduction scheme whereby 97.4 per cent majority promoter shareholders planned to acquire 2.5 per cent minority shareholding at a price fixed by the valuers.

IGF said Cadbury has 8088 shareholders in and outside India. Of them,800 are minority non-promoter shareholders. At an extra ordinary general body meeting of the Company,only 79 out of over 8,000 shareholders were present.