Hitachi to pay Rs 41.2 per share to acquire 19.4% Lalbhai stake

Ahmedabad: Hitachi Home and Life Solutions, the $3.82-billion Japanese giant, which recently created a bit of a stir in the Indian air-conditioner market by buying out the stake of its Indian partner, the Ahmedabad-based Lalbhais, in Amtrex Hitachi Appliances (AHA), will be paying Rs 41.2 per share to acquire the 19.4-per cent Lalbhai stake.

Initially, both the Lalbhais and Hitachi refused to divulge the consideration at which the stake was being picked up, with company sources saying the buyout was awaiting approvals from the government.

But as per an application filed with the Reserve Bank of India (RBI) by Hitachi, the amount has come to light. The prevailing price of the company shares is in the region of Rs 19 (Bombay Stock Exchange). In view of the hefty price being paid by the Japanese company, the Lalbhais are expected to net in a tidy sum from the transaction.

Hitachi's stake in Amtrex currently stands at 35.2 per cent. This will go up to 54.6 per cent after the acquisition. The balance 45.4 per cent will continue to remain with the public, banks and financial institutions.

“In view of the buyout, AHA managing director Naishad Parikh is very likely to bid a farewell to the company. Hitachi will want to change the board of directors and Parikh would not want to stay on,“ say sources. Meanwhile, Hitachi is expected to aggressively market the Logicool range of ACs, as also the other products it has in its repertoire.

There is also some talk of the company looking for a tie-up with a local manufacturer in the Jammu region of the state of Jammu and Kashmir to outsource production of ACs since J&K has been accorded tax exemptions on the lines of the north-eastern states from November 2002. But there is no confirmation as yet from the company's side on this count.