The Burmans of Dabur India have decided to “take control” of Eveready from the Khaitans of Calcutta.

For nearly two years, there has been intense speculation about when the Burmans would make their move on the country’s largest dry cell battery maker.

On Monday, five companies belonging to the Burman family jointly made an open offer to acquire up to 26 per cent of Eveready from public shareholders at Rs 320 a piece for a total consideration of Rs 605 crore. They also wrote a letter to the company’s board of directors seeking three berths.

The Burmans, who have close links with the city and the rest of Bengal, initially picked up a roughly 5 per cent stake in the second quarter of 2019. They gradually ratcheted it up to 19.84 per cent by mid-July 2020, becoming the largest shareholder in Eveready.

In contrast, the Khaitans’ stake fell to 4.84 per cent by the end of December 31 last year.

Over the past 18 months, the Burmans have been reluctant to spell out their strategy for Eveready after they got their foot into the door, except that they publicly insisted that the Khaitans should induct professionals to run the company, which has a market share of more than 50 per cent in the dry cell battery segment.

Mohit Burman, vice-chairman of Dabur, told The Telegraph that they believed this was the right time to step in. “We have been monitoring the situation at the company and felt that this is the appropriate time to step in. The company needs direction and the brand has immense potential. We feel we will be able to add value and take this business to the next level,” said Burman, who was born in Calcutta.

Amritanshu Khaitan is managing director of Eveready while his uncle Aditya Khaitan is non-executive chairman.

Asked about the development, Amritanshu Khaitan said he had no comment to offer.

The Eveready stock closed on the Bombay Stock Exchange at Rs 376.35, up 10.42 per cent, which is far higher than the Burmans’ offer price.

In a joint letter to the board of Eveready, the Burman group companies spelt out their plan to “take control” and seek representation on the crucial board committees. Sources said they also want the chairman’s post. “Given our significant shareholding in Eveready and our intention to acquire control, we request appropriate representation on the board through appointing three directors, each of whom would be non-executive director,” the letter said.

It added: “Such directors may be appointed at such time as is permitted by the takeover regulations. At an appropriate time, we would also request the board consider reconstituting the audit committee, the nomination and remuneration committee and such other strategic committees of the board so that the aforesaid directors have appropriate representation on such committees.”

The letter said: “We firmly believe in the business prospects of Eveready…. We are confident that (the new) directors will significantly contribute towards several strategic initiatives of Eveready.”

The letter added that the new directors would “augment shareholder value creation and assist the senior management of Eveready to gain market share and enhance the growth prospects of the business”.

Eveready has been performing well under the Khaitan family even though it reported a net loss of Rs 309.13 crore in the year ended March 2021, largely because of a one-time write-off of Rs 629.7 crore.

The company had reported its best ever earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 228.9 crore in 2020-21 –- and would have reported a net profit if it wasn’t for that one-time write-off related to loans, advances and guarantees extended to group companies in the form of various financial instruments.

Last year, the Khaitans acceded to the Burman demand to induct professional managers to run operations. As a result, Suvomoy Saha was appointed joint managing director. Earlier this month, it also appointed consultancy Bain & Co to prepare a road map for the company’s future growth.

It is not clear what role the Khaitans – who are also promoters of India’s largest bulk tea producer McLeod Russel – will now play at Eveready.

Amritanshu Khaitan’s term will end by May. It is not clear whether he will seek reappointment. That seems unlikely in view of the Burmans’ latest move. He could, however, stay on as a non-executive director.