The Telegraph
Since 1st March, 1999
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Birlas spring offer for 20% of Indo Gulf

Mumbai, June 24: Kumar Mangalam Birla is raising his stake in Indo Gulf Fertilisers through an open offer to be made by TGS Investments & Trade, a group firm.

The offer to mop up 20 per cent of the firm’s shares will be made at a price of Rs 75 apiece, a premium of 11 per cent on Indo Gulf's closing price of Rs 67.60 on BSE today.

TGS Investments wrote to exchanges that it intends to acquire up to 90,18,561 equity shares, which adds up to 20 per cent of Indo Gulf Fertilisers’ voting share capital. Hindalco Industries, Indian Rayon and Industries and Grasim are mentioned as “persons acting in concert”. The offer will open on July 31 and close on August 29.

Senior officials of the AV Birla group said the promoters hold, through Hindalco Grasim, Indian Rayon and TGS, 31.6 per cent in Indo Gulf Fertilisers. This will rise to 51.6 per cent if investors bite the bait. Buying the 20 per cent stake will cost the group Rs 68 crore.

The markets cheered the announcement with the Indo Gulf share shooting up more than 14 per cent to Rs 67.60. It opened at Rs 60.95 and peaked at Rs 70.50 amid 2008 deals that generated a turnover of Rs 2.45 crore.

Last year, the Birlas crafted a restructuring plan valued at Rs 7,000 crore by merging the copper business of Indo Gulf Corporation with that of Hindalco Industries, and demerging the fertliser business of Indo Gulf into a separate company, Indo Gulf Fertilisers.

Under the revamp scheme, one Hindalco share was issued in exchange for 12 shares of Indo-Gulf. In addition, investors received one share of the new company, Indo Gulf Fertilisers, for five of Indo Gulf Corporation.

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