SEBI asks Pyramid Saimira to make open offer at Rs 250

The Securities and Exchange Board of India (Sebi) has directed Pyramid Saimira chairman and managing director (CMD) PS Saminathan to make an open offer to acquire additional 20% shares of the company at a price of not less than Rs 250. According to Sebi, Mr Saminathan crossed the creeping acquisition limits by acquiring companys shares in the period between June and December 2008.

Shareholders of the company would definitely rejoice, as the stock is currently trading at Rs 75.40, much below the proposed open offer price. Interestingly, it appears that a section of market players had an inkling of such a development, as the stock price has already doubled since the start of the current month. The stock that closed at Rs 75.40 on Friday was trading around Rs 38 on December 1.

Sebi, in its order dated December 19, noted that Mr Saminathan acquired 4.89% shares during June 2008 at Rs 250 per share and again in the period between November 19 and December 5, 2008, he acquired 6.91 lakh shares from the market. By making these market purchases, it is clearly observed that you have crossed the creeping acquisition limits and triggered public announcement for open offer, says the Sebi order.

The market regulator has ordered Mr Saminathan to file prospectus for public announcement for open offer and acquiring further 20% of the shareholding within 14 days at Rs 250 per share. In its order, Sebi has also questioned

Mr Saminathan about reports (in October 2008) that he intended to acquire a further 25% stake in the company from other two promoters NC Ravichandran and Nirmal Kotecha for around Rs 150 crore at Rs 200 per share, when the market price was only Rs 60.