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Tata Sons shells out $360 mn to up stake in Tata Motors

13 December, 2016

Tata Sons Ltd acquired 5 crore Tata Motors Ltd shares on Tuesday, representing a 1.73% stake, that could prove crucial ahead of the extraordinary general meeting scheduled on 22 December to vote-out Cyrus Mistry and Nusli Wadia as directors.

The shares were acquired from an unknown seller through a series of bulk deals at a weighted average price of Rs 486.13 per share, a premium of roughly 7% from Monday’s close price of Rs 454.40 apiece.

On Tuesday, Tata Motors’ shares closed at Rs 470.3 per share, up 3.5% from the previous close. The stock had touched a high of Rs 486.25 on the NSE.

Morgan Stanley was the sole book runner for the bulk deal.

A back-of-the-envelope calculation indicates that Tata Sons shelled out about Rs 2,430 crore (around $360 million) for the stake purchase.

Tata Motors, in a notice to shareholders, kept 15 December as the record date for the EGM, giving right only to individuals and entities holding Tata Motors shares on the cut-off date to vote in the EGM.

Promoters and promoter group held 33% stake in Tata Motors as on the three months ended 30 September 2016, stock exchange data showed. Tata Sons’ stake stands at 26.98% and the remaining promoter stake is held by other Tata Group companies and entities part of the Tata Trust.

Tata Sons sacked Cyrus Mistry as chairperson on 24 October, roughly four years after Mistry was appointed at the helm of the $100 billion salt-to-software conglomerate. The ouster has sparked a corporate battle which appears to be taking dramatic twists and turns, legally and financially. 

Tata Sons has filed caveats in the Supreme Court and the National Company Law Tribunal (NCLT) against sacked chairman Cyrus Mistry. 

Moreover, Tata Sons have rejigged several of its group companies.

Tata Sons on Tuesday appointed Jaguar Land Rover CEO Ralf Speth and Tata Consultancy Services CEO and managing director N Chandrasekaran as directors on its board.

Ratan Tata reiterated that he had assumed the role of the interim chairman for stability and continuity. “This will be for a short time. A new permanent leadership will be in place,” he said.

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Tata Sons shells out $360 mn to up stake in Tata Motors

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