Maha Scooters okays sale to Bajaj

The board of Maharashtra Scooters (MSL) today approved the price at which the Maharashtra government could sell its stake to its joint venture partner Bajaj Auto, bringing the three-year-old impasse over the issue to an end.

Retired justice Arvind Sawant, appointed arbitrator by the state government, has come out with a valuation of Rs 151.63 a share for the shareholding of Western Maharashtra Development Corporation (WMDC), the investment arm of the state government.

Rahul Bajaj, chairman of Bajaj Auto, has agreed to purchase the government's 27 per cent stake at this price. Rahul Bajaj is also the chairman of Maharashtra Scooters.

"The arbitration is over. The deal will be executed in the next few weeks," said Sanjiv Bajaj, executive director, Bajaj Auto.

At this price, Bajaj Auto requires to pay Rs 46.78 crore to WMDC for acquiring 27 per cent stake. After the acquisition, Bajaj Auto's shareholding will go up to 51 per cent from the current 24 per cent.

The MSL stock closed at Rs 316 on the BSE, 1.02 per cen lower than yesterday's close of Rs 319.25.

In 2003, Bajaj Auto had offered to pay Rs 50 a share for the state government's stake. Later, it revised the price to Rs 75. Unhappy with the price, the government then appointed Crisil, which valued the stake at Rs 232 a share.

A Kolkata-based jute industrialist, Jai Kankaria, had expressed interest in buying the state government stake in MSL for Rs 200 a share. After this, the state government appointed the arbitrator.

In all probability, Bajaj Auto would not come out with an open offer for retail shareholders as the proposed transaction would be an inter-se transfer among promoters.