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Crompton Greaves' Demerger: SEBI's Dilemma

Published on Thu, Dec 10,2015 | 13:19, Updated at Thu, Dec 10 at 13:19Source : 

Crompton Greaves announced on 20 November that it received the Bombay High Court approval for the demerger of its consumer electrical business. This “Consumer Electrical” buisness will soon be listed. Advent International and Temaseks acquisition of the demerged Consumer Greaves consumer electricals business will trigger an open offer. How do you determine the open offer price in the absence of trading history? Should the negotiated value form the basis of the open offer price or is there some fair way for markets to determine this? The market is unclear how this open offer price will be determined.

The regulators needs to address the complexity of such transactions, by providing clear guidance. Providing shareholders clarity regarding the open offer price early, will help prevent market disruption.

The full IIAS report is attached.

Attachments : Institutional EYE_Crompton_Greaves.pdf

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