Burmans may become sole promoter of Eveready

The Burman family – promoters of Dabur India – may become the sole promoter of the country’s largest dry cell battery maker, Eveready Industries India.

Burman Group entities announced the intent to take control of Eveready on February 28 and proposed an open offer for an additional 26 per cent of the company. On completion of the open offer, the Burman family wants to be promoter.

A letter to the Eveready board from Burman Group entities in February had mentioned it intended to be ‘promoter’ upon the group acquiring control of Eveready.

The Khaitans are the existing promoter of the company, even after they relinquished management control. They stepped down from the board days after the Burmans - the largest shareholder of Eveready laid out the road map of their terms of engagement for the future.

Asked about a copromoter role for the Khaitans, Mohit Burman, who has been spearheading the family’s interest in Eveready, said, “There will be only one promoter”.

The Burmans — who have been buying into Eveready since 2019 and became the largest shareholder in July 2020 – have made it clear that their offer is for control. Discussions around a change in Khaitan promoter tag may happen after the open offer is completed, indicated sources.

The Khaitan holding in Eveready stood at 4.9 per cent at the end of March, down from 22.99 per cent two years back, and 44.19 per cent in March 2019, as financiers invoked pledged shares (shares were pledged to borrow funds for group firm, Mcnally Bharat Engineering Company).

Over the past two weeks, the Burmans have been scooping up shares from the open market in Eveready, according to a mandate given to JM Financial Services at the time of the open-offer announcement. The mandate was to acquire 5.26 per cent share at a price not more than ~320 apiece, which is equal to the open-offer price.

From April 13 onwards, Burman Group entities have purchased more than 1 per cent, taking their holding to 20.96 per cent, according to the latest filing with the stock exchanges.

While the open-market operation is on, taking advantage of the slide in the Eveready scrip, the open offer in Eveready is awaiting approval from the Securities and Exchange Board of India.

The open offer, according to the tentative schedule, was to open on April 26. On the timeline, Burman said, “We are awaiting the markets regulator’s nod on this, after which we will proceed.”

The Eveready stock has been hovering over the offer price of ~320 a share. Asked whether the offer price could be revised upwards, Burman said, “We have tabled a fair price we believe in and have no intention of revising the offer price.”

On Monday, the Eveready stock closed at ~319.9 on the BSE.

With the Burmans defining the path ahead, for the Khaitans, it’s a protracted descent — from pipping the Wadias of Bombay Dyeing and acquiring Eveready (then Union Carbide India) in 1993 in one of the biggest corporate takeover of its time to losing grip on it.

The Burmans — who have been buying into Eveready since 2019 and became the largest shareholder in July 2020 – have made it clear that their offer is for control