RIL will not issue any extra shares

MUMBAI: A JP Morgan Chase report quoted by Bloomberg said RIL made $15.4 per barrel a year ago, but earned just $10 in the last quarter of 2008 and it is estimated to make $9.5 per barrel in 2009 and 2010. In such a scenario, market players said, economies of scale would be advantageous to RIL.

As per the terms of the merger, which is effective April 1, 2008, RIL will not issue any additional shares to itself ��� like every other RPL shareholder , even RIL (which holds over 74% in RPL) is theoretically entitled to its own shares.

But, legally, for this particular merger (treasury stocks), RIL will extinguish these shares. ������ RIL will issue 6.92 crore new equity shares to the existing shareholders of RPL,������ a joint release said. This will result in a 4.4% increase in equity base of RIL, from Rs 1,574 crore shares to Rs 1,643 crore. ������ Consequently , the promoter holding in RIL will reduce from 49% to 47%,������ the release added.

M&A experts said that usually in a merger of two listed entities, multiple factors are considered to arrive at a merger ratio. Parameters like stock price over a period of time, price-earnings multiples of the companies and its peers.