Know All About Pricol's Block Deal & Minda Corp's Likely Acquisition: Abhishek A Rastogi Exclusive | Summary and Q&A

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February 17, 2023
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CNBC-TV18
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Know All About Pricol's Block Deal & Minda Corp's Likely Acquisition: Abhishek A Rastogi Exclusive

TL;DR

This video discusses the potential hostile takeover of Recall, examining the chances of other entities acquiring control, the importance of synergies between management, the financial stability of Recall, and the role of price in the takeover.

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Questions & Answers

Q: How likely is Minda or any other entity to acquire control of Recall through the open market?

Acquiring control of Recall through the open market may not be easy for Minda or any other entity due to the increasing share price and the potential resistance from institutional investors. The share price has already gone up significantly in the last year, making the valuation higher and the acquisition costlier. Moreover, Recall's improved financial condition, strong contracts, and the growing demand for EVs and auto products make it a less attractive target for a hostile takeover. Synergies between management are crucial for the success of such a takeover, and without them, the acquisition may not be very successful.

Q: What are the options available for Minda in this potential hostile takeover?

Minda, in its attempt to acquire control of Recall, has various options. It can engage in concrete discussions with financial institutions and investors, aiming to gain their confidence in Recall's prospects. Minda may also consider buying shares from the open market at the right price, ensuring that any decisions are not made in haste. Building strong relationships with institutional investors is essential to prevent any rifts due to the potential hostile takeover, as maintaining stability and profitability for all parties involved is crucial. Thus, discussions, careful strategic moves, and strengthening Recall's financial position are the key options for Minda in this situation.

Q: How important is the price factor in this potential takeover?

Price plays a significant role in the potential hostile takeover of Recall. The stock price of Recall has already witnessed a substantial increase of about 60% in the last year. The price before the COVID-19 pandemic was considerably lower. Therefore, both Recall and Minda will be cautious about the price at which they acquire shares from the open market or financial institutions. The price will act as the bottom line, influencing the decisions made by both parties. However, other factors such as synergies between management, financial stability, and future growth prospects also hold importance in determining the success of the takeover.

Summary & Key Takeaways

  • The promoters of Recall claim to have 37% stake with backing from institutional investors, making it challenging for other entities like Minda to acquire control through the open market.

  • Synergies between management play a crucial role in the success of a hostile takeover, and Recall's improved financial condition and strong prospects in the EV and auto segments make it a less desirable target.

  • Recall's cash-rich position may lead to a gradual buyback or open-market purchases, but acquiring control through these means may not be easy due to the increasing share price.

Q: How likely is Minda or any other entity to acquire control of Recall through the open market?

Acquiring control of Recall through the open market may not be easy for Minda or any other entity due to the increasing share price and the potential resistance from institutional investors. The share price has already gone up significantly in the last year, making the valuation higher and the acquisition costlier. Moreover, Recall's improved financial condition, strong contracts, and the growing demand for EVs and auto products make it a less attractive target for a hostile takeover. Synergies between management are crucial for the success of such a takeover, and without them, the acquisition may not be very successful.

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