With Oberoi-promoted EIH Ltd getting a nod from the Securities and Exchange Board of India (Sebi) for its Rs 1,300-crore rights issue, experts say the tussle for taking over the company looks set.
In EIH, promoters hold 32.31 per cent while Reliance Industries (RIL) has 14.8 per cent and ITC owns 14.98 per cent. Sebi mandates an open offer of additional 20 per cent stake when a shareholder’s stake reaches 15 per cent.
Jagannadham Thunuguntla, head of research at SMC Global Securities, said, “These three parties will be closely watching the rights issue book building and they would look at increasing their stake.”
Since ITC and RIL have a little less than the trigger point, experts said if the rest of the shareholders do not subscribe to the issue, open offer will be inevitable. A RIL spokesperson declined to comment on whether the company would go for an open offer. “In the rights issue, all shareholders will get additional shares in equal proportion, which will not change the shareholding structure and there should not be any trigger for open offer,” said the spokesperson.
Top management at ITC had already hinted that EIH was not a closed chapter. “We will take a final decision as and when the offer details are made available,” said a spokesperson.