Surge In Bsl Scrip Erodes Open Offer Lure

The continuous surge in the BSL stock since the Sardas announced their 30 per cent open offer to the company's shareholders, has taken the sheen off the offer.

Over the past seven trading sessions, the BSL scrip has risen by 27 per cent from Rs 62.55 to Rs 79.55 on the National Stock Exchange, pushing the ruling price to a shade below the open offer price of Rs 80.

The BSL scrip today touched a high of Rs 79.55 before finally settling at Rs 75.20. Volumes were also significantly high at 97,220. In the last one week, over 2.6 per cent BSL shares changed hands on the NSE.

 

Market sources said, if this trend continues, the ruling price will exceed the offer price, making the latter unattractive. "A section of market operators are pushing up the prices which will ultimately benefit the promoters as retail investors are unlikely to opt for a conditional open offer when the market price is as attractive, if not more," they said.

Arun Kumar Churiwal, chairman and managing director of BSL, however, said the promoters holding has not changed. He also said that the identity of the acquirer will be known only once the shares are transferred. The promoters' holding in BSL is at 36.78 per cent.

When asked whether the promoters were discussing with the financial institutions for a negotiated deal, Churiwal refused to comment.

Financial institutions and insurance companies hold 8.66 per cent in the company and can play a determining role in the success of the open offer.

Market sources pointed out that if the Sardas' open offer fails, this strategy will be a weapon for any promoter to thwart takeover bids in the future.

Ghanshyam Sarda, chairman Kolmak Chemicals, said: "We have 11.86 per cent in BSL, even if the offer fails, we can always seek a berth on the board of the company."

When asked whether a revision in the offer price was in the offing, Sarda said it was premature to comment at this point as the offer will open only on September 30. "We will take a call on the issue at the appropriate juncture", he said.

Sardas have appointed SBI Capital Markets as merchant bankers. Kolmak apart, the other Sarda companies that figure in the consortium of acquirers include Super Jupiter Courier Pvt Ltd and S B Agro (India) and Kailash Agarwal, a Dubai-based businesman having interest in shipping, real estate and textiles. Agarwal is learnt to have agreed to part finance the offer and share responsibilities in the management of BSL, if the offer results in transfer of management control to the acquirers.