Burmans Step In To Take Control Of Eveready, Announce Open Offer

The Burman family – promoters of Dabur India – announced an open offer on Monday for a 26 per cent holding in the country’s largest dry cell battery maker, Eveready Industries India, a year and a half after it became the largest shareholder in the Brij Mohan Khaitan family-controlled company.

In a statement, Mohit Burman, vice-chairman Dabur India, said, “We have been monitoring the situation of the company and felt that now is an appropriate time to step in. The company needs direction and the brand has immense potential. We feel we will be able to add value and take this business to the next level."

The open offer was priced at Rs 320 per share for acquisition of 26 per cent of the expanded voting share capital aggregating to a total consideration of up to Rs 605 crore. The Eveready stock closed at Rs 376.35 on the Bombay Stock Exchange on Monday.

In a letter to the board of Eveready, the Burman Group informed that it intends to acquire control and requested appropriate representation on the board through appointing three directors, each of whom would be a non-executive director.

Sources indicated that it would want to appoint a chairman post the open offer.

In the letter to the board, the Burman Group also said that it had placed an order with its stock broker, J M Financial Services on February 28 to purchase approximately 5.26 per cent holding in Eveready, triggering the open offer.

It is not clear what role the Khaitans will play post the open offer. Amritanshu Khaitan declined to comment.

At present, the company is steered by Amritanshu Khaitan as the managing director whose tenure comes to an end in May 2022. Business Standard reported in December that Khaitan was likely to relinquish the driver’s seat in Eveready.

Apart from Amritanshu, the Khaitan family is represented by Aditya Khaitan as the chairman in a non-executive capacity, on the board of Eveready.

However, as of December 2021, the Khaitans’ holding in the company stood at 4.84 per cent. The Burman Group’s holding is at approximately 19.84 per cent.

Steps to professionalise Eveready have been in the works since Burmans picked up shares and made a pitch for professional management. The first step was taken last August when a joint managing director was appointed.

Suvomoy Saha, a non-executive director, took charge as a joint managing director with effect from August 10, 2021, to “enhance leadership” in seeking “re-orientation” of processes in the post-pandemic world and for “new growth avenues”. More recently, the company roped in consultancy firm, Bain & Company to evolve and execute a comprehensive business strategy.

The Burman Group in its letter to board said that it firmly believed in the business prospects of Eveready and were supportive of its growth going forward.

On board representation, it was confident that the directors would significantly contribute towards several strategic initiatives of Eveready. Such representation on the board will also augment shareholder value creation and assist the senior management of Eveready to gain market share and enhance growth prospects of the business, the letter further mentioned.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor