19 firms line up buy-back offers

It is going to be a hot summer for the markets, judging by the number of open offers lined up. The promoters of as many as 19 companies have lined up buy-back offers in April and May. They are expected to spend Rs 1,407 crore on the exercise.

Of the 19 buy-back offers, 16 companies are buying back shares through tender offers to shareholders, while three companies have proposed to buy-back shares through open market operations.

The promoters of 16 companies propose to acquire a total of 87.89 million shares valued at Rs 1,165 crore through open offers to shareholders.

The three companies going through the open market process include GlaxoSmithKline Pharma, Aegis Logistic and DIL. The three companies have proposed to buy back 4.35 million shares and have set aside Rs 243 crore from general reserves.

Of the 16 open offers to shareholders, the current market prices of eight companies have been above the offer price. The remaining eight companies are traded below their open offer prices.

Sunshield Chemicals currently commands a premium of 271 per cent over the offer price of Rs 10. Bihar Caustic Chemicals is quoted at Rs 55.70 against the offer price of Rs 23.27.

Alstom commands a 45 per cent premium over its offer price of Rs 75.03. The current market prices of Crisil, SKF, Shriram Investment and Shriram Transport are also well above their respective offer prices.

SKF's promoters have proposed to delist the company after buying back the remaining 24.48 million shares with the public, amounting to 46.42 per cent of the company's paid-up capital at a floor price of Rs 153 with offer price of Rs 180. The company proposes to spend Rs 440 crore on the proposed buyback offer.

McGraw Hill Companies (of which Standard & Poors is a division), and its wholly owned subsidiary, S&P India LLC have made an open offer to buy 3,534,488 shares of Crisil at Rs 680 per share aggregating to Rs 240 crore.

Of the 16 open ofers, the biggest is that of Shaw Wallace of Rs 300 crore, which is slated to open on April 18 and close on May 7. McDowell & Company Ltd (acquirer) along with its wholly-owned subsidiary Phipson Distillery and United Spirits, a wholly-owned subsidiary of Phipson Distillery Ltd, jointly and severally have made a voluntary open offer to the shareholders of Shaw Wallace to acquire up to 12,001,518 fully-paid equity shares of the company representing 25 per cent of the equity capital at a price of Rs 250 per share.