FIs stay away from Otis Elevator offer
Mumbai—Financial institutions holding about 7 per cent in Otis Elevator (India), may not surrender their shares to Otis Mauritius in the open offer slated to close on Tuesday.
Otis Mauritius has made an open offer to acquire 31.1 per cent stake in Otis Elevator at Rs 280 per share to raise its stake to 100 per cent.
HDFC chairman Deepak Parikh said HDFC had decided to stay away from the open offer as it felt that the offer price was low and did not reflect the intrinsic value of price of the shares of the company.
HDFC holds nearly 2 per cent of Otis equity of Rs 12.54 crore. Other institutions like UTI, LIC and GIC subsidiaries hold another 5 per cent.
Besides institutions, several employee shareholders have also decided against offering shares in the open offer as they find that the offer price is lower compared to that paid to Indian partners Mahindras in 1999.
Otis Elevators of the US, the principal stakeholder of the Otis Group, had offered Rs 375 per share for the acquisition of their 23.8 per cent stake. With this, the parent company’s stake had increased to 68.9 per cent.
The open offer price of Rs 280 a share offered to Indian shareholders is based on the Sebi formula of average of preceding six months. In fact, the price is at a premium of about 10 per cent to the average price of Rs 255 a share.
Sources said around 6 per cent of shareholders have surrendered their shares till Monday evening.
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LIC to acquire stocks from UTI portfolio
Mumbai--The Life Insurance Corporation of India (LIC) is planning on acquiring 41 blue-chip stocks from the Unit Trust of India through off-market deals.

The investment committee of the company unanimously approved the proposal, in a meeting attended by the LIC chairman G N Bajpai, directors S A Dave and R P Chitale, and the managing director A Ramamurthy.

The current market value of the stocks LIC intends to purchase is around Rs 930 crore, informed sources said. LIC has also decided that the corporation would buy the stocks from UTI through direct deals, subject to compliance with the concerned regulatory framework. The off-market deals will also save LIC brokerage charges.

The firms whose stocks the corporation has agreed to pick up include; Reliance Industries (50 lakh), Reliance Petroleum (50 lakh), Hindustan Lever (10 lakh), State Bank of India (8 lakh), Tata Steel (15 lakh), Tata Power (2 lakh), Corporation Bank (14.75 lakh), Grasim (5 lakh), Indian Oil Corporation (1 crore), ONGC (1 crore), BSES (15 lakh), Larsen & Toubro (5 lakh), ITC (10 lakh) and VSNL (2 lakh).

The list also includes Indian Rayon, Indian Aluminium, Ranbaxy Laboratories, Nicholas Piramal and Indo Gulf, besides ICE companies like Infosys, NIIT, Global Tele, Satyam Computers and MTNL.

The committee did not approve the purchase of the shares of IDBI, Nalco, Morepan Lab, Raymonds, Vyasya Bank, Bank of Baroda and Bank of India.

In value terms, the maximum outflow for the LIC will be on account of the purchase of one crore shares of ONGC valued at around Rs 162 crore, closely followed by Reliance Industries at Rs 161.43 crore, Indian Oil at Rs 140 crore and ITC at Rs 75.50 crore.

The purchase of these shares will help the corporation increase its stake in Bharat Electronics by 3.12 per cent, in Oriental Bank of Commerce by 2.28 per cent, in ITI by 1.93 per cent, in Shipping Corporation by 1.42 per cent, in Chennai Petroleum by 1.34 per cent, in Indian Oil by 1.28 per cent, in Corporation Bank by 1.23 per cent, in HPCL by 1.18 per cent and in BSES by 1.09 per cent.
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LIC plans to increase stake in Corporation Bank, OBC
Mumbai--The Life Insurance Corporation of India (LIC) has ambitious plans ahead which banking industry people say is part of LIC's strategy to become a financial sector power house.

LIC plans to increase its stake in Corporation Bank and Oriental Bank of Commerce (OBC) in addition to getting a small equity share in ICICI Bank through off-market deals with the Unit Trust of India.

LIC will buy 43.88 lakh shares of OBC that will enable LIC to get an additional 2.28 per cent stake in OBC by paying around Rs 15.56 crore.

With this, its stake in the Delhi-based public sector bank will cross 11 per cent as it had recently upped its stake in the bank to 9 per cent through open market purchases. The OBC scrip is currently traded at around Rs 35 on the bourses.

LIC also plans to get an additional 1.23 per cent stake in Corporation Bank by buying 14.75 lakh shares for around Rs 20.74 crore which will push up LIC's stake to over 28 per cent. LIC had earlier picked up a 12.32 per cent stake in the bank.

Subsequently, the bank had given a preferential allotment of 2.4 crore equity shares of Rs 10 each at a premium of Rs 186 per share to LIC, thus increasing the latter's stake to 27 per cent. The Corporation Bank scrip is trading at around Rs 141 now.

The government holding in Corporation Bank over time has fallen to 56.94 per cent from 68.33 per cent. The 10 lakh shares of ICICI Bank, which LIC proposes to pick up from UTI, will increase LIC's stake to around 1.70 per cent. Its existing stake in the bank is around 1.25 per cent.

LIC will also increase its stake in State Bank of India by 0.15 per cent through the acquisition of 8 lakh shares.
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US stocks low on warnings about Intel
New York—Stocks fell Monday when one brokerage reduced its profit and revenue targets for Intel and another warned that the chip maker would cut prices later this month.
In midday trading, the Dow Jones Industrial Average was down 68.50 at 10,444.28. One of Dow's biggest losers was Intel, down $1.04 at $30.64 after Salomon Smith Barney reduced its outlook for the company. Meanwhile, Lehman Brothers said in a research note it expected Intel to lower prices by 50 percent on its Pentium 4 chip on Aug. 26.
The market's broader indicators also declined. The Nasdaq Composite Index fell 20.65 to 2,045.68, and the Standard & Poor's 500 Index was off 10.28 at 1,204.07.
Intel's chief competitor, Advanced Micro Devices fell $1.27 to $17.98 and PMC-Sierra declined 38 cents to $36.19.
Other tech losers included Dow industrial IBM, down $1.76 at $106.42, and Cisco Systems, which slipped 33 cents to $19.72 and is scheduled on Tuesday to release its fiscal fourth-quarter earnings.

The largest decliners included retailers, expected to issue poor July sales results on Thursday. Radio Shack, which said Monday that July sales slipped 6 per cent over last year and was downgraded by Merrill Lynch, tumbled $2.33 to $26.57. Best Buy, another electronics retailer, also suffered, falling $2.74 to $64.81.
Investors were disturbed by the prospects of weak store sales because it indicates the economy, two-thirds of which depends on consumer spending, continues to slump. Even Wal-Mart, considered one of the retailing sector's safest best, traded lower, down 74 cents at $54.65.
Other sizable blue-chips losses came from 3M, which fell $1.28 to $110.45, and Alcoa, which stumbled 97 cents to $36.80.
There were gainers, some of the largest being driven by company-specific news. US Airways rose $1.10 to $17.98 after Global Airlines said it will offer $1.8 billion to acquire it. Global is the New York holding firm that tried in vain earlier this year to buy Trans World Airlines. (AP)
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