Tata Tea wants 20% more in Mt Everest

MUMBAI: Tata Tea today made an open offer to purchase an additional 20 per cent stake in Mount Everest Mineral Water (MEMW) for Rs 95.19 crore.

The Tata group firm will acquire up to 67.99 lakh equity shares at a price of Rs 140 each, to be funded through internal accruals, the company said in a public announcement.

DSP Merrill Lynch is the manager to the public offer.

On June 1, Tata Tea agreed to buy 25.74 per cent stake in Mount Everest for around Rs 115 crore through subscription of preferential shares from promoters of MEMW. It said it would acquire another 20 per cent later.

Tata Tea would subscribe MEMW's 50.99 lakh equity shares, constituting 15 per cent of the paid-up capital, on preferential basis.

It would also acquire 31.10 lakh equity shares -- 10.77 per cent equity -- held by Foresight Holdings Pvt Ltd, promoter Vinod Sethi and MEMW Managing Director Salim Govani.

Along with the open offer and the share purchase agreement, the total acquisition price to be paid by Tata Tea would be around Rs 210 crore.

The company would be responsible for appointing a new management team for day-to-day operations of Mount Everest.

MEMW proposes to use the proceeds of preferential issue for brand building, marketing, distribution, setting up additional pumping capacity and modernising the bottomline facility.

Shares of Tata Tea plunged 4 per cent and were trading at Rs 914.50, while Mount Everest also fell 5 per cent to touch Rs 124.95 on the BSE.