Bharati, ABG get Sebi nod for open offer

Bharati Shipyard and ABG Shipyard have got the market regulator’s nod for their open offer bids to buy additional stake in Great Offshore.

The Securities and Exchange Board of India (Sebi) has asked the merchant bankers of these two bidders to decide on the timelines for the competitive bids. The open offer price can be revised by these two companies till the last 10 days before the closure of the open offer period. The open offer, sources said, should remain open for a period of 25 days.

The open offer of both companies have been pending for the last four months, as the market regulator was scrutinising the competitive bids from the two rivals.

Bharati Shipyard had earlier said its open offer would be from July 25 to August 13 and ABG Shipyard was planning it from August 13 to September 1. According to Sebi’s decision, the dates will have to be common now.

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.

ABG’s share prices closed at Rs 201.85 on the Bombay Stock Exchange today, 1.53 per cent more than the close yesterday.

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.