Orissa Sponge Iron & Steel, which is a takeover target of three suitors, is back in the news. One of the suitors-- Bhushan Steel has got a green signal from markets regulator Sebi to come out with its announced open offer to acquire additional 20% stake in the firm. Bhushan Steel will have to cough up around Rs 171 crore($34 million) to acquire this additional stake from the market.
Bhushan Power (led by estranged brother of Bhushan Steel promoter Neeraj Singal) and Monnet Ispat (led by Jajodias) are also in the fray and have also applied to Sebi for making an open offer. While Bhushan Power had made the offer at Rs 300/share, Monnet Ispat (which claims the support of the existing promoter of Orissa Sponge) made the offer at Rs 310/share.
Bhushan Steel, which owns 19% in Orissa Sponge, has made the highest price offer at Rs 330/share, among the three. The open offer from Bhushan Steel was mired in controversy over alleged violation of takeover norms by the firm. It was alleged that the firm actually held a higher stake in the firm that what it had disclosed in the Bhubaneshwar-based company.
Sebi has taken a view that there is no need to stall the open offer made by Bhushan Steel, even as it will conduct an investigation into the allegations against the firm, according to this ET report:
Bhushan Steel’s open offer was scheduled to open on April 27.
Orissa Sponge scrip closed at Rs 317.2 valuing the company at Rs 635 crore($125 million) as against its market cap of just Rs 112 crore five months back.