M&M announces open offer for Punjab Tractors, subsidiaries
13 Mar 2007
The tractor company won the bid for acquiring a 43.3 per cent stake in Punjab Tractors last week from private equity firm Actis and the Burman family in a deal that values Punjab Tractors at about Rs2,200 crore.
M&M made the offer to acquire up to 12.15 million shares from shareholders of Punjab Tractors at Rs360 per share, the same price that it agreed to pay for the 43.3 per cent stake. Separately, M&M made an offer to buy almost 480,000 shares, or 20 per cent, in Swaraj Automotives, in which Punjab Tractors owns 24.2 per cent, at Rs244 per share.
The company also made an open offer to buy 20 per cent, or 2.48 million shares in Swaraj Engines Ltd, in which Punjab Tractors owns 33.2 per cent at Rs151 a share. The financing of the three offers would be through internal accruals and / or corporate borrowings, M&M said. The offers, which are not subject to a minimum level of acceptance, open on 3 May and close on 22 May.
The Punjab Tractors scrip closed at Rs308.35 down from an opening of Rs314 per share on the Bombay Stock Exchange, while the Swaraj Engines scrip fell 11.5 per cent to close at Rs146.05 per share. The drop could be driven by the Punjab Government''s recent announcement to hold an enquiry into the divestment of Punjab Tractors, say analysts.
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