The takeover battle between ABG Shipyard and Bharati Shipyard, the top two ship builders firms in the country, for acquiring controlling stake in Great Offshore has got diffused after Bharati raised the stakes by offering 5.3% more than its previous offer of Rs 560/share to acquire 20% additional equity in the pubic-listed company.
Bharati Shipyard, that has been slowly hiking its stake from open market, already owns over 23% in First Carlyle Ventures-backed Great Offshore, the country’s largest integrated offshore services firm.
ABG Shipyard said on Wednesday it has sold 3.08 million shares or 8.27% stake (almost the entire holding) in Great Offshore at an undisclosed price. At the average share price on Wednesday ABG would have encashed somewhere close to Rs 170 crore from the selloff. ABG Shipyard's cost of acquisition is estimated to be much lower as it started acquiring when the price was less than Rs 400 and its last offer price was Rs 520/share.
A market watcher told VCCircle that ABG would have netted Rs 47 crore profit from this sale. Its average acquisition price is estimated to be at around Rs 418 per share, while the sale price could be around Rs 570 per share.
In the process, it seals the takeover battle in favour of Bharati Shipyard which raised the offer this week to Rs 590/share. At this price, it would need to shell out Rs 460 crore ($100 million) in the open offer.
The developments came just days after both the suitors came out with revised scheduled dates for their competing offers last week. In fact, ABG Shipyard’s offer was scheduled to open on Thursday (December 3, 2009).
As expected, ABG Shipyard shares surged over 9% at the close of the day due to capital gain on its investment, while Bharati Shipyard scrip rose over 10% as it now gets to control Great Offshore. Meanwhile, Great Offshore shares dropped 6% as expectations of a further revision in offer price receded.
It was in mid-November that capital market regulator Sebi gave its green signal to the two competing open offers by rival bidders ABG Shipyard and Bharati Shipyard. Both bidders had raised their offers several times since May, when Bharati Shipyard first acquired a 14.89% stake in Great Offshore. This followed forfeiture of shares pledged by Great Offshore promoter Vijay Sheth with Bharati. This was at a transaction price of Rs315/ share.