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| ABG Shipyard offers counterbid in Great Offshore |
| BS Reporter / Mumbai Jun 23, 2009, 12:14 IST |
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ABG Shipyard Ltd, India’s biggest non-state shipbuilder, has offered a counterbid for a controlling stake in Great Offshore which understandably may consider raising the offer price.
The company offered to pay Rs 375 a share to acquire a 33.85 per cent stake in Great Offshore Ltd. The offer counters a bid of Rs 344 a share, about 6 per cent lower than the closing price of Rs 363.35 on the BSE, made by its rival Bharati Shipyard Ltd on June 3.
The company will hold a meeting later on Tuesday to take a call on the counteroffer. The offer will open on July 25 and end on August 13.
Great Offshore Ltd gained as much as 6.4 per cent on the BSE early Tuesday.
According to Securities and Exchange Board of India (Sebi) guidelines, the floor for the open offer price has to be the higher than the last two weeks' stock price or the last six months' average price.
In Great Offshore’s case, the average of the daily high and low of the stock for the last two weeks is Rs 343.16, while that for the last six months is Rs 257.04 as on June 3. The company has chosen the offer price of Rs 344, which is just the floor price mandated by the regulator.
Usually, companies make an offer that's higher than this to attract a good response from shareholders.
On May 8, Bharati Shipyard said that it had acquired a 14.99 per cent stake in the company from its promoter Vijay Sheth who had borrowed money against his shares. In June 2007, Sheth pledged his entire 15.5 per cent stake with IL&FS and Motilal Oswal, who started to seek margin money following a plunge in the value of shares pledged by Sheth.
Sheth, whose stake currently is below 1 per cent, stepped down as vice-chairman and managing director of Great Offshore recently, clearing uncertainties about the firm's management control.
P C Kapoor, managing director of Bharati Shipyard, had earlier said that competitors such as Punj Lloyd and ABG Shipyard had shown an interest in buying Great Offshore shares from the open market. Institutions and the public hold around 84 per cent stake in the company.
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