Honeywell may buy back public shareholding in Tata Honeywell

Mumbai: With Honeywell Inc buying out Tata group's stake in Tata Honeywell, the US company is likely to buy back public shareholding in the domestic company. According to market sources, there is a possibility of Tata Honeywell stocks being delisted from the exchanges. It is likely that the management might adopt a reverse book building route to delist the stock.

Honeywell Asia Pacific, the parent company, has agreed to buy the entire 40.6 per cent holding of the Tata Group companies at Rs350 per share. With the buyout of Tata stake, the entire stake of Honeywell Asia Pacific in the domestic company has gone up to 81.6 per cent. The stake buyout will not entail an open offer as there is no change in management, but the US company may delist the stock.

The New Jersey-headquartered Honeywell Inc is a Fortune 100 company. In 1987, the US company forged a joint venture with the Tata group to cater to automation and control solution demand in the country.

It is likely that the US company may merge the entity with its present operations in Gurgaon, where it is manufacturing some of the automation and control products.

According to analysts, after merger the Indian operations would become a mirror image of the international operations, which includes aerospace products and services, electronic materials, home and building control, performance polymers and chemicals, and transportation products.

Tata Honeywell reported excellent results for the full year 2003- 04. Its revenues rose by 27 per cent to Rs3,424 million for the year ended March 31, 2004, compared to Rs2,691 million in the corresponding period of the previous year. For the 12-month period, the company posted a good performance with profit before tax of Rs 201 million increasing by 20 per cent over the previous year's Rs167 million. The profit after tax stood at Rs 253 million compared to Rs168 million in the previous year, registering an increase of 51 per cent.