JSW Steel today launched an open offer to buy 20 per cent additional equity in Ispat Industries at Rs 20.54 a share, over 3 per cent lower than closing price on the Bombay Stock Exchange (BSE) yesterday.
After the public announcement of open offer, Ispat scrip today ended at Rs 23.60 a piece, 11.32 per cent higher than its previous closing of Rs 21.20 on the BSE.
JSW yesterday announced the Rs 2,157-crore deal to acquire 45 per cent stake in Mittal brothers promoted Ispat Industries.
According to market regulator Sebi's guidelines, any company buying more than 15 per cent in another firm will have to make an offer to buy 20 per cent additional stake.
"Today we have made public announcement to launch open offer at Rs 20.54 a share for Ispat shareholders," JSW Steel's Joint MD and CFO Seshagiri Rao M V S said.
The open offer would cost Rs 1,329.43 crore to JSW, which post acquisition would be largest domestic steel producer.
Asked when the open offer would hit the market, Rao said that "JSW has 14 days time to announce the dates of open offer, which is also subject to Sebi approval".
On the other hand, the JSW scrips closed at Rs 1202.90 per piece, down 0.75 per cent.
Enam Securities, who is managing the open offer on behalf of Sajjan Jindal-led company, said in a public announcement that JSW Steel proposes to acquire 64.72 crore shares of Ispat, representing 20 per cent (at a face value of Rs 10 each) of the total shares at a price of Rs 20.54 per share in cash.
The Sajjan Jindal-led company had said on Tuesday that it will buy a 41.29 per cent stake in Ispat through a preferential issue of fresh shares, which will reduce the Ispat promoters' stake to 26 per cent.
