Four suitors out of a total of six have backed out from the Tide Water Oil’s (TWO) divestment process leaving IBP and Caltex, the Chevron Texaco US subsidiary, in the race for taking over the Andrew Yule subsidiary.

Initial bid for expression of interest evoked interest from players such as Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), Balmer Lawrie and Shell, apart from IBP and Caltex.

Sources close to the development said four players have moved off after having completed the due-diligence some time back. It was learnt that the companies were not too excited about the ruling price of scrip and the probable reserve price.

Four Star which holds 22 per cent in Tide Water was taken over by Chevron Texaco, Canada, so Caltex already holds 22 per cent in Tide Water. With the 42 per cent being divested, representing 28 per cent currently held by Andrew Yule and 14 per cent held by financial institutions, Caltex appeared to be well placed to pick up 64 per cent in Tide Water Oil.

Kolkata’s Mahendra K Jalan of Keventer Agro, who holds 14 per cent in TWO, has reportedly been approached for offloading his stake. Jalan admitted he had held discussions with merchant bankers for offloading his stake in the company but said he was not aware of the identity of the buyer. Caltex officials could not be contacted for comments.

Sources said consultants have reportedly advised immediate merger of TWO with the acquirer. However, this would require the acquirer to make an open offer for acquiring the 36 per cent stake currently held by the public.

The disinvestment department of the government of India was expected to invite bids in TWO in October. A Rs 200 crore company, TWO manufactures 35,000 kl of lubes annually.

The brand equity of Veedol as well as a dedicated marketing network has helped TWO corner a stable share in the domestic lube sector, particularly in the southern and western markets.