LIC may exit Ambuja, ACC via open offer

Life Insurance Corporation (LIC) of India, which owns Ambuja Cements and ACC shares worth ~7,000 crore, may tender its shares in the open offers to be launched by the Adani family, which acquired Ambuja Cements for $10.5 billion (~81,400 crore approximately) on Sunday.

Adani is making an open offer for Ambuja Cements at ~375 per share and ~2,300 per share for ACC.

Ambuja shares closed at ~368 on Tuesday, while ACC shares closed at ~2,226 per share. The dates of the open offers have not been announced yet.

LIC has made a sizeable gain in Ambuja and ACC shares in the past.

According to statistics collated by Business Standard, the Corporation had 8.9 per cent stake in Ambuja Cements worth ~1,243 crore as on June 2006. It currently owns 6.3 per cent stake in Ambuja worth ~4,487 crore. The Corporation owned 10.2 per cent stake in ACC worth ~1,603 crore as on June 2006 and currently owns 5.7 per cent worth ~2,359 crore.

A banker said the success of the twin open offers worth ~31,140 crore to be launched by the Adani family will depend on the share-price movements of both companies.

“The small and minority shareholders will not offer shares if the market price is above the offer price and the open offer will fail,” said a banker close to the development.

Bankers said LIC is likely to tender its shares in both companies and will make a profitable exit.

“Talks are currently on between bankers to the offer and institutional investors, and a final decision will be taken before the offer closes,” said a banker.