Linde India has decided to voluntarily delist its shares from the Indian bourses after the completion of the $80-billion global merger between international industrial gas giant Linde AG and Praxair Inc last month.
The company, having its headquarters in Calcutta, informed the National Stock Exchange and the Bombay Stock Exchange on Friday that it has received a letter on November 7, 2018 from its promoter (The BOC Group Limited) expressing its intent to voluntarily delist under the extant regulations of Sebi.
The process will involve the acquisition of about 2 crore equity shares of Rs 10 each representing 25 per cent of the share capital of Linde India, previously known as BOC India before German major Linde AG acquired BOC’s parent globally in 2006. The promoter now holds 75 per cent of Linde India. Linde’s shares jumped to hit the 20-per-cent upper circuit on the BSE and closed the day at Rs 582.65.
The delisting price would be determined according to a reverse book building mechanism after the fixation of the floor price. The offer price has been set at Rs 328.21 per share and, assuming full acceptance, the total funds required for fulfilling the payment obligation will be Rs 700 crore. However, going by Friday’s closing price, the offer could top Rs 1,242 crore. The last date of competitive bids has been set as December 4, 2018 and the bids will be opened on January 9, 2019.
Reliance Mutual Fund, which holds a 9.84 per cent stake, is likely to be the determining factor in price discovery.
“The objective of the delisting offer is to obtain full ownership of equity shares of the company, which will provide the promoter group with the operational flexibility to support the company’s business and future financing needs,” the company’s statement said adding the delisting will result in lower expenses that are incurred on account of listing on the bourses and management of investor relations.
The company, which appointed ICICI Securities to carry out the due diligence of the delisting process, said the promoters consider the delisting route as a quicker and more cost effective way to comply with the Sebi guidelines.
Fair trade watchdog Competition Commission of India has already given its approval to the merger of Linde and Praxair in September but it has also asked for the divestment of assets so that the proposed combination does not have any adverse effect on competition.
The regulator has ordered the sale of Linde India’s entire shareholding in Bellary Oxygen Company Private Ltd, a joint venture between Linde India and Inox Air Products Ltd. Moreover, Praxair has to sell three on-site plants in Jamshedpur and two cylinder filing stations located in Asansol and Calcutta. Also, Linde’s on-site plant JSW–2 located at Bellary, Karnataka and two cylinder filing stations in Hyderabad and Chennai are to be sold to independent entities
“Following the completion of business combination, the companies are focussing on divestures required by respective antitrust authorities. Until the completion of majority of divestures in the United States of America, Linde AG and PAC 1 (Praxair) are obliged to operate their business globally as separate and independent companies and not coordinate any of their commercial operations,” Linde India said in a notice for the shareholders.
