Punjab Tractors promoters seek rebids

Rejecting offers from the seven companies that bid for a controlling 43.5 per cent stake in Punjab Tractors Limited in January, private equity fund Actis and the Burmans, the promoter family of foods and pharmaceutical company Dabur, have asked interested parties to make "binding bids" by the start of next week.

Sources close to the deal say the re-bid was prompted partly because the offers were non-binding and also since they were much lower than the company's share price, which shot up 30 per cent in the month after the bids were invited.

The stock was being traded at Rs 230-250 two months ago. It touched its 52-week high of Rs 358.90 on February 8 and closed at Rs 316.20 on Friday, dropping by Rs 3.40 (1.06 per cent) over Thursday's trading price of Rs 319.60, in line with the 389-point fall in the Sensex that day.

Actis holds 29.5 per cent and the Burmans hold 14 per cent in the Rs 958-crore tractor company, the country's fourth-largest, with an 8 per cent market share. Financial institutions, the public and banks hold the remaining stake.

Tractor market leader Mahindra & Mahindra (M&M) and Ashok Leyland are reportedly the frontrunners in the race for Punjab Tractors, with both having quoted Rs 350 per share. A Choudhari, president, farm equipment sector, M&M, which has a 31 per cent market share, refused to comment on the issue.

R Seshasayee, managing director, Ashok Leyland, said, "The only statement I can make at this stage is that we are in the race with our firm bid."

Sonalika Tractors, the country's third largest tractor company, is also in the fray, backed by its financial partners Citigroup, Yanmar, 3i and JM Financial.