The share price of Colour-Chem Ltd, a Clariant group company, has been marching ahead on the bourses since November on hopes that its parent company will come out with a buyback offer at a higher premium.
The share closed 1.16 per cent up at Rs 86.90 on the National Stock Exchange (NSE) against its previous close, while it ended at Rs 54.90 on the Bombay Stock Exchange (BSE), a 57 per cent gain.
As on end-September, foreign promoters hold a 50.1 per cent stake in Colour-Chem, mutual funds and the Unit Trust of India jointly hold 12.08 per cent, banks/financial institutions/insurance companies 11.71 per cent, public 22.71 per cent and the balance with private corporate bodies and non-resident Indians/overseas corporate bodies.
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"The environment is conducive for a buy-back offer as most foreign companies are turning their subsidiaries into 100 per cent owned entities. Clariant is also hoped to do the same," an analyst said.
Recently, parents of Carrier Aircon, Phillips and Hoganas India had made open offers to buy out the balance holdings in their respective subsidiaries.
"Indications are that the Clariant group is likely to buy out the outstanding holding in Colour-Chem at around Rs 90-115 per share," a dealer said.
The stock has moved up from around Rs 35 levels to current 70 levels on the back of talks of buyback and buyout.
However, analysts believe that the open offer for at least 20 percent equity as per the Securities and Exchange Board of India takeover rules cannot be below the price of Rs 188 per share (the price at which Hoechst AG had transferred the shares of Colour-Chem India to EBITO Chemiebeteiligungen AG in October 2000.)
Given that Hoechst AG had sold off its chemical business internationally to Clariant.