GSPC's open offer for Gujarat Gas gets lukewarm response

State-run Gujarat State Petroleum Corporation (GSPC) Group's open offer for additional 26 per cent stake in Gujarat Gas Company Limited (GGCL) has evoked lukewarm response.

Against the proposed open offer for 26 per cent of fully diluted equity capital of GGCL, GSPC Group, through its subsidiary, GSPC Distribution Networks Limited (GDNL) or the acquirer and persons acting in concert (PAC) including GSPC, Gujarat State Petronet Limited (GSPL) and GSPC Gas Company Limited (GSPC Gas) could acquire only 8.58 per cent shares out of 26 per cent, which the company intended to purchase from Gujarat Gas shareholders through open offer.

The acquirer, GDNL had made an open offer to acquire up to 33,345,000 or 26 per cent of fully paid up equity shares of Rs 2 each of GGCL at the price of Rs 314.17 per share.

However, in a post offer statement filed with the Bombay Stock Exchange (BSE) on Monday, it was informed that GDNL was able to acquire only 11,000,330 shares on actuals. On Monday, GGCL shares closed at Rs 265.45 with a loss of 3.28 per cent from previous close on BSE.

According to industry insiders, the shareholders of GGCL anticipated higher prices for share as against the offer price.

"At first, it appears that the reason for lukewarm response to the open offer is that shareholders of GGCL expected better prices than what was put on offer," said a research analyst with a Mumbai-based equity advisory firm.

According to GSPC sources, this means investors want to keep GGCL shares with them for better valuations.

As per the information provided by the manager of the offer, JM Financial Institutional Securities Pvt Ltd, aggregate number of shares tendered on actuals was 11,018,500, of which aggregate number of shares accepted was 11,000,330 as against the proposed 33,345,000 shares.

Post offer, the shareholding of GDNL stands at 73.70 per cent as against proposed 91.12 per cent. The public shareholding in GGCL has reduced from 34.88 per cent to 26.30 per cent post the open offer.

The open offer was announced in October last year, soon after GSPC decided to acquire British Gas (BG) Group's 65.12 per cent stake in GGCL for Rs 2,464 crore at the share price of Rs 295 per share.