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| Bharati abides by Sebi advice, revises open offer |
| BS Reporter / Mumbai Nov 25, 2009, 01:01 IST |
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Bharati Shipyard said its open offer to acquire 20 per cent stake in Great Offshore was being revised, and it was now under Section 10 of the Takeover Code as advised by the Securities and Exchange Board of India (Sebi).
The capital markets regulator had last week given clearance to the open offers made by rival companies Bharati Shipyard and ABG Shipyard for the additional stake in Great Offshore. But Sebi had cleared Bharati Shipyard’s offer under Section 10 of the Takeover Code as that was the first offer made. Open offer made under Section 10 intends to buy strategic stake. Bharati had revised its initial offer and made it under Section 12 which intends to acquire management control. It did so after ABG Shipyard came into the fray making the offer under Section 12. Now Bharati has gone back to its initial offer.
The merchant bankers of both the companies are working on to decide the common dates for the competitive bids. Announcement for that is expected in a few days.
Bharati Shipyard had acquired a 14.89 per cent stake in Great Offshore in May at a price of Rs 315 per share from its vice-chairman and managing director, Vijay Sheth, following an invocation of shares which he had pledged. This left Sheth with less than 1 per cent stake in the company and he lost control. Following this, on June 4, Bharati made an open offer to acquire an additional 20 per cent stake in the company at Rs 344 a share.
On June 23, ABG Shipyard, a rival of Bharati, made a counter-offer to acquire 33.8 per cent in Great Offshore at Rs 375 a share. On the same day, Bharati acquired an additional 14.5 per cent in a bulk deal at Rs 403 a share and later increased its open offer price to Rs 405 a share.
ABG Shipyard further increased its stake by purchasing an additional 6 per cent stake in three tranches from the open market and increased its open offer price to Rs 450 a share and finally to Rs 520 a share.
Great Offshore is four times bigger than Bharati Shipyard and twice as large as ABG Shipyard. The acquisition of Great Offshore will help both the companies to graduate to being a marine player. While shipbuilders only make and repair ships and vessels, the marine industry also engages in offshore engineering and other marine support services. Being a marine player will give both Bharati and ABG assured orders for shipbuilding, repairs and dry-docking.
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