FIs to work out common approach at hostile takeovers

MUMBAI, NOV. 10. Leading financial institutions (FIs) are to meet shortly to work out a common approach towards hostile corporate takeovers.

For the past few months, FIs have not met and there was need for a common approach where funding by the institutions are involved, Industrial Development Bank of India (IDBI) chairman and managing director Mr. G.P. Gupta told newspersons here on the sidelines of the inaugural session of the sixth Association of Development and Industrial Banks in Asia (ADIBA).

Asked about the recent cases of Bombay Dyeing and Gesco corporation, he said ``hostile takeovers are not in our interest. It has to be decided case by case and for this, it is necessary for FIs to come together to have a common approach and arrive at a consensus''.

Mr. Gupta said ``in a hostile takeover one did not know the objective - whether it is merely to make money and what is his game, and the plans that he (the acquirer) has in mind''.

On IDBI's plans for universal banking, he said there were no plans to convert itself into a universal bank in the near future.

``There is not going to be any change in the structure like IDBI Bank merging with IDBI for next three to five years'', Mr. Gupta said.

He said the IDBI Bank would concentrate on corporate financing and on short term loans for one year period and above.

According to an IDBI official, three international consulting firms - Anderson Consulting, Boston Group and McKinsey - have been shortlisted to help draw up a road map for its graduation into a universal bank and also to refurbish its image among investors.

On the merger of CARE with ICRA, the official said SBI Caps and S.Bilimoria, Chartered Accountants, have been shortlisted as merchant bankers. ``We are looking at two separate valuations and hence they both have been appointed. While SBI Caps has submitted its preliminary report, Bilimoria's are expected to submit their final report by the month end'', he said.

On divestment of SIDBI (Small Industries Development Bank of India), stake, Mr. Gupta said a meeting has been convened for November 13 to discuss this issue.

- PTI

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