A Takeover Battle - Grasim vs. L&T

All L&T shareholders including the Aditya Birla Group would get shares in the new company. However, L&T, as a company, would not hold anything. Reportedly, the relationship between the board members of Grasim and L&T also became increasingly hostile. L&T and Grasim nominees on the L&T board were resorting to 'mutual fault finding.'

While other directors blamed Grasim for insider trading, Grasim nominees blamed the other board members for the 'below par performance of L&T in 2002 (the company had reported a profit of Rs 188.9 million for the quarter ended June 2002, as compared to Rs 651 million for the same period in 2001)...

Under this proposal, CDC was to subscribe to optionally convertible debentures of L&T's demerged cement business and with an option to convert the debentures into 6.8% equity stake by December 2004. If CDC decided to hold on to the debentures, it could redeem them in three equal installments between 2004 and 2007. According to a clause in CDC's proposal, CDC would convert the debentures into equity only when the share price of the demerged cement company reached a specific price, called the strike price. The strike price was fixed as Rs 158 per share. Another clause in CDC's proposal stated that L&T required the approval of CDC if it wanted to come out with an initial public offering (IPO) for the cement business...