Tata Sons made an open offer on Friday for acquisition of 16.69 per cent equity stake in Computer Maintenance Corporation (CMC) Ltd at a price of Rs 281.26 per share. The company informed The Stock Exchange, Mumbai (BSE) about the offer and also filed the offer document with the market regulator, the Securities and Exchange Board of India (Sebi) on Friday.

The offer, lead managed by DSP Merrill Lynch, opens on November 27, 2001 and will close on December 26, 2001. Tata Sons acquired majority stake (51 per cent) of the Government of India at Rs 152 crore in CMC Ltd last week and under the mandatory provision of the deal, the acquiring company was to make an open offer within seven days of acquiring the shares.

The total fund requirement for acquiring 25.27 lakh shares from public shareholders under the offer in CMC at Rs 281.26 per share is Rs 71.10 crore.

The stock gained by Rs 1.65 to close at Rs 271.65 and the counter clocked the volume of 88,733 shares on the BSE. Post disinvestment, while Tata Sons will hold 51 per cent in CMC, 32.31 per cent lies with the government. Out of the 16.69 per cent, Unit Trust of India and other mutual funds hold 2.52 per cent, banks and financial institutions hold 8.31 per cent, foreign institutional investors (FIIs) hold around 0.34 per cent and the rest 5.52 per cent is being held by public.

Once the open offer is completed, there are chances that the company might get delisted if Tata Sons manages to garner a 90 per cent shareholding in CMC.

The new structure of the 12-member Computer Maintenance Corporation (CMC) board post-disinvestment will have six members from the Tata group, four public representatives and two from the government. Further, it was also reported that the chairman of CMC will also be from the Tata group.

Earlier it was reported that CMC will continue to operate as an independent entity like Tata Infotech or Tata Elxsi, contrary to rumours of it being merged with Tata Consultancy Services (TCS), currently a division of Tata Sons. Though the official bid for CMC was submitted by Tata Sons, the day-to-day operations will be managed by TCS.

CMC Ltd posted a net profit of Rs 30.78 million for the quarter ended June 30, 2001 as against Rs 23.07 million for the corresponding period last fiscal. Total Income for the quarter ended June 30, 2001 is at 
Rs 903.06 million as against Rs 703.46 million for the quarter ended June 30, 2000.