| Videocon to remain strategic investor in Great Offshore | |
| BS Reporter / Mumbai June 27, 2009, 0:35 IST | |
 Videocon group Chairman and Managing Director Venugopal Dhoot has decided to remain a strategic investor in Great Offshore, the drilling company for which Bharati Shipyard and ABG Shipyard have made competitive bid offers.
Dhoot holds about 3 per cent stake in the company and is considered close to Rishi Agarwal, promoter of ABG Shipyard. Today he consulted his bankers to decide the move. “We will continue with our stake,” said the chairman of consumer durable major. “ABG has the requisite funding; they may not require our support,” he said.
Dhananjay Datar, chief financial officer of ABG Shipyard, declined to comment on the issue. However, he admitted that he has a substantial credit line from IL&FS for the acquisition.
Both ABG and Bharati are likely to revise their open offer price next week above Rs 403 a share. On Tuesday, ABG, which holds about 2.5 per cent stake in the drilling company, made a competitive bid to acquire a 32.12 per cent stake at Rs 375 a share. This was followed by Bharati acquiring an additional 4.58 per cent at Rs 403 a share from Bharat Sheth, cousin of Vijay Sheth, the erstwhile promoter of Great Offshore. Thus, according to the guidelines of the market regulator, his offer price was naturally increased to Rs 403 from Rs 344 made earlier. Now he plans to revise the offer price beyond Rs 403.
Meanwhile, Life Insurance Corporation, the largest institutional investor in the country, has already increased its stake in Bharati Shipyard to 9.66 per cent in the last 10 days from 7.06 per cent earlier. Stock of Great Offshore on Friday was up by 2 per cent to Rs 421 a share on the Bombay Stock Exchange. Sensex, the benchmark index of the exchange, gained 2.9 per cent to 14,764 on the day.
However, stock of both the bidding companies were down by 0.15 per cent on the apprehension of bidding war making the buy out of the drilling company expensive. Bharati Shipyard closed Rs 167 a share and ABG Shipyard closed Rs 204 a share on the day.
Ambit capital, a domestic brokerage, is giving Rs 410 a fair value to Great Offshore share based on the earnings estimate for the company in the next financial year. However, the industry sources expect the bidding war taking the offer price much beyond that.
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