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M&M offer for Punjab Tractors shares opens 3 May at Rs360

M&M offer for Punjab Tractors shares opens 3 May at Rs360
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First Published: Tue, Mar 13 2007. 01 29 AM IST
Updated: Tue, Mar 13 2007. 01 29 AM IST
Mahindra and Mahindra Ltd, India’s largest tractor and utility maker, said it will make an open offer to shareholders of Punjab Tractors Ltd and Swaraj Engines Ltd to acquire a 20% stake each in both companies to comply with Indian takeover rules.
The offer opens on 3 May and will close on 22 May, it said in a statement filed in the Bombay Stock Exchange.
Mahindra and Mahindra and its unit Mahindra Holdings and Finance Ltd have offered Rs360 a share for Punjab Tractors, the price at which it bought a 43.5% stake in India’s fifth-largest tractor maker last week. Additionally, it has offered Rs151 a share for Swaraj Engines, Punjab Tractors’ diesel-engine making unit.
That may cost it an additional Rs475 crore if all minority shareholders fully subscribe to the offers.
The offer for Punjab Tractors is at a 16.7% premium to its most recent closing price, while that for Swaraj Engines is at a 3.3% premium. The Punjab Tractors scrip closed 0.37% down at Rs308.35 on BSE and Swaraj Engines was down by 7.56% at Rs146.05.
Under the Securities and Exchange Board of India regulations, a firm which buys more than 15% in a listed company directly or indirectly, has to make an open offer for an additional 20% stake in the acquired company.
Punjab Tractors has a 33.2% stake in Swaraj Engines. If Mahindra acquires anything more than 46% of Swaraj Engines, it will effectively hold 15% in Swaraj.
Mahindra outbid Ashok Leyland Ltd, India’s second-largest truck maker for the 43.5% stake.
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First Published: Tue, Mar 13 2007. 01 29 AM IST