The shareholding of private corporate bodies in VST Industries Ltd has risen by 10 per cent between June and December 2001 to 29 per cent of the paid-up equity of the company.
Between the crucial months of June and September 2001, their holdings rose 8.26 per cent, to 27 per cent.
This was the period during which two entities -- ITC Ltd and the Damanis of Mumbai -- had bid for VST shares through competing open offers.
ITC had bid for VST shares through its investment subsidiary, Russel Credit Ltd. (RCL), while the Damanis had bid through Bright Star Investments (BSI), a finance company.
Towards the end of the open offer, which closed in July, both bidders had claimed to have picked up around 8-9 per cent through their offers.
Market sources said had this been so, then the corporate bodies' holding should have risen by 16-18 per cent in the period and not just 8-10 per cent.
"The Russel Credit offer picked up close to 9 per cent from shareholders, and we stand by this position we had announced then," ITC sources said.
Messages left on the cell phone answering machine of merchant banker John Band of ASK Raymond James, which managed the Damani offer, were not returned.
The rise in PCB shareholding has come from the holdings of the Indian public, which declined from 21 per cent in June to 17 per cent in September and 16 per cent in December. The share of mutual funds and Unit Trust of India also fell from 2 per cent in June to 0.47 per cent in December.
However, these shares were not sold in response to the open offer, as the holding was steady at 2 per cent in September.
BSI had made the offer at Rs 112 per share, to which RSL had responded with a price of Rs 115. BSI then upped the ante to Rs 118, and RSL followed suit with Rs 120. RSL then raised its offer price to Rs 125 on its own, and BSI retaliated with Rs 151. RSL did not revise its offer in response.
ITC had justified its open offer as expression of interest in the Indian tobacco sector, and in a company promoted and managed by BAT plc of UK, which was also ITC's largest single shareholder. The Damanis had sought to justify the offer as an investment decision describing VST as an undervalued stock.
