Mumbai: The board of auto major Mahindra and Mahindra (M&M) has approved the proposal to bid for a 43 per cent stake in Punjab Tractors Ltd (PTL). The company, however, did not disclose details of the bid.
Dabur group promoter Burman family and private equity firm Actis who jointly hold nearly 43 per cent stake in PTL are selling their shares in the company.
While Actis holds around 29 per cent, the Burman family holds 14.15 per cent stake in PTL. Together, the 43 per cent stake is valued at over Rs1,000 crore.
Besides M&M, there are six players who had put in bids for the 43 per cent PTL stake.
The Hindujas-promoted Ashok Leyland, the Tata group and the Italian tractor major SAME Deutz-Fahr seem to have emerged as the major contenders in the race.
The other players are TAFE, Sonalika group and a private equity consortium. It is learnt that the bid put in by the Sonalika group has been disqualified, as the bid price was too low. A few bidders are expected to put in higher bids in the final rounds.
For Ashok Leyland and the Tata Group, the purchase of the stake would signify an entry into the tractor segment. The Tata Group is acting in concert with Fiat, its partner for passenger cars and commercial vehicles. The Fiat chief in a recent visit to India had indicated that his company would partner with the Tata Group to enter the domestic tractor market.
Actis had given financial services firm Citi the mandate to call for bids from potential buyers for its stake. The private equity firm had acquired 23.45 per cent of the stake in mid-2003 from the Punjab Government at Rs 153 per share.
PTL, which has a dominant presence in North India, also has a 14 per cent stake in Swaraj Mazda, 33 per cent in Swaraj Engines and 24 per cent in Swaraj Automotives.