Minda’s Hostile Attempt To Take Over Pricol Locked In Court Battle

Coimbatore is an unlikely venue for a corporate contest. That’s why this one has come as a surprise. The out-of-blue equity buying in Coimbatore-based Pricol by its rival Minda Corporation Ltd a few months ago has stunned the traditional industrial groups in the city, which was once hailed as the Manchester of India. Minda bought a little over 15.7% shares in Pricol for Rs 400 crore.  What emboldened Minda to embark on such a hostile raid on a traditional industrial establishment in Tamil Nadu? There could be several reasons for this. The Pricol family structure, perhaps, tempted Minda to have a go at this Coimbatore-based company.  The battle is truly on now with the Pricol family doing everything – legally and strategically – to stop the raider on its track. The imbroglio arising out of this hostile takeover has already landed in courts. The Pricol-Minda battle takes one back to former times when non-resident Indians Swraj Paul and Manu Chhabria exploited a change in the rule for NRI investment in Indian companies to raid Escorts and L&T. That they did not eventually succeed is a different matter.  But Pauls and Chhabrias have taught a lesson or two to India Inc. If Minda has to be stopped, Pricol owners have to solidify their equity position. The economics of ownership has indeed become dizzy.