Hindujas eye Tide Water Oil

KOLKATA: After keeping a low profile in the mergers and acquisitions space, Hindujas have now decided to bid for lubricant maker Tide Water Oil, an associate company of diversified PSU Andrew Yule.

Andrew Yule & Company (AYCL), LIC and United India Insurance are planning to divest their combined holding of 40.3% in Tide Water Oil. Tide Water was originally floated as a joint venture with Caltex (now Chevron) 60 years back. Chevron still holds 22% in Tide Water through a subsidiary called Four Star Oil.

"We will look at the terms of reference for the Tide Water bid. If it suits us, then we may bid. There is a synergy between Gulf Oil and Tide Water," Hinduja group VC Subir Raha said.

Incidentally, ONGC had once evinced interest in Tide Water when the former was headed by Raha. "The valuation too was done, but due to some technical reason, an ONGC-Tide Water Oil deal did not materialise," sources said.

Tide Water is a key player in the diesel engine lubricant market and markets these under Veedol brand. Besides, it has recently introduced ‘Eneos’ brand for two-wheelers. Tide Water has a technical collaboration with Nippon Oil Corporation (formerly Mitsubishi Oil). The company posted a turnover of Rs 423 crore in 2006-07.

Currently, AYCL holds 26% in Tide Water. LIC and United India Insurance jointly hold 14.3% stake in the company. On Wednesday, AYCL CMD Kallol Datta had said the insurance companies too will divest their holding in Tide Water. Tide Water Oil’s stock is now hovering at around Rs 4,200-4,300 on BSE and NSE. In November, its share price touched a 52-week high of Rs 5,220 on the NSE when the stake sale decision was announced.

Sources said seven merchant bankers, which include Deloitte, SBI Capital Markets, PwC, ICICI Securities and Srei, are in the race for managing the Tide Water stake sale. "AYCL will appoint one or more merchant bankers on Saturday," sources added.

Sources said Chevron has so far not evinced interest to buy out AYCL’s holding in Tide Water.