Mcleod Russel acquires The Moran Tea Company Ltd

Mcleod Russel India Ltd on December 01, 2006 has announced that the Company has signed a Term Sheet with Moran Holdings PLC for acquisition of 1,520,000 Equity Shares (72.38%) in The Moran Tea Company (India) Ltd (Moran India) at a cost of Rs 41.49 crores. The transaction values Moran Tea at Rs 273/- per Share. Further the Company, would pay a Non-compete fee of GBP 7,50,000 to Moran Holdings PLC. The transaction is subject to necessary approvals.

Moran India is engaged in growing and manufacturing of quality tea. It has 4 Tea Estates in the quality tea belt in the State of Assam producing around 4.3 million kgs of tea annually. Moran Tea has been a regular dividend paying Company.

The acquisition of Controlling Stake of Moran India will prove highly beneficial to both the Companies by way of deriving synergy benefits in terms of cost reduction and pricing power both in the export and domestic market due to economies of scale. This in turn will foster profitable growth and will enhance shareholder value for both the Companies. Through this acquisition, the Company will consolidate its leadership position in tea plantation business with an annual tea output of over 75 million kgs of tea.

In terms of the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, The Company alongwith its associates proposes to make an Open Offer to acquire up to 20% of the Share Capital of Moran India from the Public Shareholders. ICICI Securities Ltd has been appointed as the Manager to the Open Offer.

The Company intends to finance this acquisition through internal accruals.

Source : Equity Bulls

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