Jyothy Laboratories is likely to see German consumer products company Henkel buy 26 per cent stake in the fabric whitener and detergent maker.
The German company intends to make a comeback in the country through the stake purchase. Jyothy Laboratories had bought 50.97 per cent stake in the Indian unit of Henkel when the German firm exited India in 2011. The deal had given the former rights over Henkel’s brands such as Henko, Mr. White, Chek, Margo and Neem.
Henkel is really keen on picking up the stake in Jyothy Laboratories, which will be through an issue of fresh shares or preferential shares which can be converted into equity shares later or a combination of both. The share price could be negotiated around Rs. 500-600, it said. The negotiations between the two firms are on as the deadline ends in March 2016.
However, in a clarification, Jyothy Labs said: “We would like to inform you that as per our letter dated May 5, 2011 to exchanges, Henkel AG has an option to acquire upto 26 per cent of the equity share capital of Jyothy Laboratories through primary and/or secondary transactions, after a period of 5 (five) years, subject to the terms and conditions to be mutually agreed. They have an option which they can exercise between April 1, 2016 and March 31, 2017. The article incorrectly mentions that the deadline for the same is March 31, 2016. As of now there is no development in this regard and the report is speculative. In case there is any development; we shall inform the exchanges.”
