JSW Steel today launched an open offer to buy 20 per cent additional equity in Ispat Industries at Rs 20.54 a share, over three per cent lower than the 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 had 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 a 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 the largest domestic steel producer. Asked when the the open offer would hit the market, Rao said, “JSW has 14 days’ time to announce the dates of the open offer, which is also subject to Sebi approval”. On the other hand, JSW scrips closed at Rs 1202.90, down 0.75 per cent.
Enam Securities, which is managing the open offer on behalf of the 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.
