Bharati Shipyard’s bid to wrest control of Great Offshore Ltd took a new turn on Tuesday with ABG Shipyard, a rival company, making a counter offer to the shareholders of the Mumbai-based offshore service company and Bharati immediately upping its offer price.
ABG Shipyard through its fully-owned subsidiary, Eleventh Land Developers, on Tuesday made an open offer to acquire 32.12 per cent stake in Great Offshore at Rs 375 a share, which is 9 per cent higher than Bharati’s offer price of Rs 344 a share. Bharati’s open offer followed its acquisition of 14.89 per cent stake in the company last month. ABG also holds 2.02 per cent stake in Great Offshore.
Today, Bharati acquired another 4.58 per cent stake in the company through a block deal at Rs 403 a share, which automatically raised its open offer price (as per Securities and Exchange Board of India regulations for determining the open offer price).
With this, the two private sector shipyards are in the race to acquire controlling interest in Great Offshore, originally promoted by Mr Vijay Sheth and created through a demerger from Great Eastern Shipping Company. Mr Sheth was forced to sell his entire stake of 14.89 per cent to the promoters of Bharati Shipyard after he failed to pay back the Rs 200 crore borrowed from them against a pledge of his own shares in Great Offshore.
Great Offshore shares rose 7.92 per cent to Rs 423.9 on the BSE — Rs 20 higher than Bharati’s revised offer price. Bharati Shipyard’s shares fell 5.03 per cent to Rs 162.5, while ABG’s closed 1.79 per cent higher at Rs 213.15. With Tuesday’s purchase of additional shares through block deals from other Sheth family members, Bharati’s stake in Great Offshore has increased to 19.47 per cent.
Mr P. C. Kapoor, Managing Director, Bharati Shipyard, said the company would be making a revised offer within a week.
Mr Rishi Agarwal, Chairman, ABG Shipyard, said his company has already arranged for funds to finance its open offer. The company needs around Rs 471 crore to acquire 32 per cent stake.
“We have cash reserves of Rs 250-300 crore and we have tied up with lenders for the balance.” If necessary the company may go in for qualified institutional placement, he said. “We will evaluate Bharati’s offer and take a decision soon,” said Mr Agarwal.
According to analysts, whoever gets the control of Great Offshore will benefit as the offshore services business has tremendous revenue potential.
Source: The Hindu Businessline