The Madura Coats share jumped 8 per cent to close at Rs 35.55 today after hitting an intra-day high of Rs 38.55 on reports that J&P Coats of the UK has decided to make an open offer for a 36.80 per cent stake in the company at Rs 40 per share.
The stock of the textiles company notched up a traded volume of 81,910 shares on the Bombay Stock Exchange and 2.38 lakh shares on the National Stock Exchange.
The rise in Madura Coats was purely on the announcement that J&P Coats of the UK will make an open offer to acquire the outstanding 21,669,392 equity shares representing 36.80 per cent of the paid-up capital of Madura Coats.
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The UK parent has set a price of Rs 40 per share for the buy-back plan. In February 2002, the company announced that its board had passed a resolution approving the buyback of 14,714,000 equity shares at a price not exceeding Rs 27 per equity share.
Incorporated as Madura Coats on July 31, 1974, Coats Viyella India (CVIL) got the latter name with effect from June 4, 1993.
The company has a collaboration with the promoter -- Coats Viyella of the UK -- which has a 51.52 per cent stake in the company.
Other group divisions are Coats India, Madura Industrial Textiles and Madura Fabrics.
CVIL came out with a rights issue (at a Rs 20 premium) aggregating Rs 24.07 crore in July 1994 to part-finance the modernisation and upgradation of existing production facilities, the expansion of production capacities by installing additional machinery, etc, at a project cost of Rs 31.46 crore.
CVIL is in the area of textiles which includes the conversion of natural and synthetic fibres into yarn and threads, and the designing of fabrics.
Its major products are yarn, threads, consumer fabrics and industrial textiles. Its garments division markets brands such as Allen Solly, Louis Philippe and Van Heusen. These brands have carved a niche for themselves in the premium category.
In June 1998, the company changed its name back to Madura Coats from Coats Viyella India due to the de-merger of Coats Viyella Plc. It also converted the capital advance of Rs 6.05 crore into an equity investment in Madura Spinning & Manufacturing, consequent to which it became a subsidiary.
Earlier, the company had sold its Madura Garments Division to Indian Rayon Industries for Rs 189.23 crore as an ongoing business.
On February 19, 2002, the board of directors of Madura Coats also approved, in principle, the amalgamation of three wholly owned subsidiaries, namely Kor Investments, Vaigai Investments and Madura Agro Industries with the company, in accordance with Sections 391 to 394 of the Companies Act 1956, with a view to simplifying the financial structure.
The company has also decided to pass enabling resolutions at the ensuing general meeting to voluntarily delist the equity shares of the company from Ahmedabad, Bangalore, Kolkata and Delhi stock exchanges.