ABG acquires over 15% in Great Offshore

Stock gains nearly 20% on the Bombay Stock Exchange.

The stock of ABG Shipyard, India’s largest private ship builder, gained 19.68 per cent on the Bombay Stock Exchange at Rs 298.85 a share by close of Friday’s trade. The increase in the price came after the announcement that it received a 15.23 per cent stake of Great Offshore in the open offer.

Officials at ABG Shipyard could not be reached for comment on what do they propose to do with the stake.

ABG and its rival, Bharati Shipyard, had made competitive bids to acquire 33.8 per cent and 20 per cent stakes in Great Offshore respectively. ABG’s offer was to acquire stake at Rs 520 a share, while Bharati’s offer was to acquire at Rs 590 a share. Bharati received 27 per cent of the stake against its offer to acquire 20 per cent. The open offers concluded last month.

Bharati Shipyard had acquired 14.89 per cent in Great Offshore in May at Rs 315 a share from the latter’s then vice-chairman and managing director, Vijay Sheth, following an invocation of shares that he had pledged. This left Sheth with less than 1 per cent 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 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 then bought an additional 6 per cent 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. This made Bharati increase its open offer price to Rs 560 a share, after increasing its stake to 22.8 per cent from open market transactions.

In December, before the open offer started, Bharati once again revised its price to Rs 590 a share. The following day, ABG sold its shares and effectively exited the race.