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Renaissance seeks Sebi decision on Castrol offer

India's Renaissance group said on Tuesday it had written to the country's market watchdog to speed up its decision on an open offer by British oil giant BP Amoco Plc to buy an additional 20 per cent stake in Castrol India.

The investment companies of the Renaissance group, that has interests in real estate and investment advisory services, hold about 100,000 Castrol India shares bought at an average price of Rs 250 a share over the last two months.

"We've written to the Securities and Exchange Board of India's appellate tribunal to protect the interests of investors and expedite its decision on the open offer," Abhishek Dalmia, managing director of Renaissance Estates, said.

The open offer has been mired in controversy because Sebi and BP Amoco along with its wholly owned subsidiary, Castrol UK, differ on the price of the offer.

BP Amoco owns 51 per cent of lubricants major Castrol India because it acquired Burmah Castrol Plc last year.

In December, BP Amoco announced an open offer for an additional 20 per cent of Castrol India's equity at Rs 311.91 a share, based on the average price over six months.

Sebi objected to the open offer price, saying it should be Rs 350, calculated from March 14, 2000 when the Burmah Castrol takeover was announced and not July 7 when the transaction was completed.

Indian takeover rules require acquirers to make an open offer to buy a minimum of 20 per cent from other shareholders, based on the average price over six months.

BP Amoco later contested Sebi and the matter is now with the Sebi appellate tribunal. A hearing is expected next week.

Dalmia said the Sebi appellate tribunal should ask the acquirers to honour the deal at Rs 311.91 a share and give an undertaking to the regulator to make good the difference to investors if the decision went against them.

"The SEBI tribunal is not the last court of appeal, matters can drag for long in higher courts. If interim relief is not given, it could be years before shareholders see the money," Dalmia said.

Castrol closed 2.1 per cent lower at Rs 223.70 on Tuesday on the Bombay exchange while the benchmark index lost 2.42 per cent.

At the current price, Castrol is quoting at a 28 per cent discount to the open offer price of Rs 311.91. The discount widens to 36 per cent if calculated on the Rs 350 price.

In October, Dalmia was involved in a hostile bid to takeover Bombay-based property developer Gesco Corp Ltd. He subsequently sold his shares to the company's promoters and a white knight in January at a premium to the then market price.

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