Mumbai: ABG shipyard has offered 11% more than rival Bharati Shipyard for a controlling stake in Great offshore and analysts expect the month-long takeover battle to intensify.
ABG on Wednesday bought a 5.2% stake in Great Offshore in a series of block deals at Rs450 a share valuing the firm at Rs1,670 crore.
Great Offshore said in a filing to the stock exchange on Thursday ABG has also raised its offer to the same price.
The move is the latest in a string of counter-bids by the two shipbuilders, which began at 344 rupees by Bharati in June. ABG’s latest offer betters that by Bharati at Rs405 a share earlier this month.
“Great Offshore is trading at peak valuation but if you look at it in isolation from 300 to 450 (rupees) it looks a little too much,” said Kunal Lakhan, a sector analyst at KR Choksey. “Don’t be surprised if there are more block deals at higher levels.
Great Offshore, which offers oil rigs and offshore platforms to firms such as Reliance Industries and Oil and Natural Gas Corp, is caught in the battle with two private shipbuilders, who are eyeing its strong assets, customers and cash balance.
“Great Offshore is a rich company. Needless to say, there is so much interest. And, the price war has been a dream run for the shareholders,” a dealer with a foreign brokerage said.
Bharati acquired the founder’s stake in Great Offshore in late May when he failed to repay margin calls on shares, which he had pledged to the shipbuilder.
Bharati then made a public offer at Rs344 a share for a further 20% stake in early June, in line with Indian takeover regulations.
However, the battle began in late June when ABG entered with a higher offer of Rs375 a share. Bharati responded in early July with a Rs405 offer after buying shares from a large shareholder at that price.
Bharati now holds 20% of Great Offshore and after Wednesday’s deal ABG owns a little more than 7%.
Sundaram BNP Paribas and DSP Blackrock sold their stakes, totalling to 2.7% in Great Offshore at Rs450 each on Wednesday while ABG Shipyard bought 3.9% at the same price, data on the Bombay Stock Exchange showed.
ABG bought another 1.3% in Great Offshore, data on the National Stock Exchange showed.
Bharati is advised by SBI Capital Markets, a unit of top lender State Bank of India and ABG is advised by Kotak Mahindra Capital Co, the former Indian partner of Goldman Sachs and unit of private lender Kotak Mahindra Bank.
A senior ABG official was not available for a comment while two senior Bharati officials declined to comment.
At 12.12 pm, shares in ABG Shipyard was up 3.4% at Rs210.05 and Bharati Shipyard was down 2% at Rs149 in the Mumbai market.
Great Offshore, which has risen 28% since June, was up 1.8% at Rs466.