Mumbai: JSW Steel Ltd, India’s third-largest steel producer, is in advanced talks to buy out the controlling stake of Ispat Industries’ founders, two sources directly involved with the matter said on Monday.
An announcement is likely to come later in the day, one of the sources said. Neither source gave financial details.
Based on Thursday’s closing price, the founders’ 45.5% stake would be valued at $294 million.
Shares of Ispat, valued at $645.2 million, rose more than 10% in early trade on Monday. They have risen by more than a quarter since the beginning of December on speculation that ArcelorMittal, Tata Steel and JSW were looking to buy the struggling firm.
Ispat is controlled by Pramod and Vinod Mittal, the brothers of the world’s fifth richest man, billionaire Lakshmi Mittal, who heads the world’s largest steelmaker Arcelor Mittal.
Lakshmi Mittal branched out on his own in 1976 due to differences with the family.
Ispat has posted losses for the past five years except for fiscal year 2008. Its net loss narrowed to Rs3.2 billion in the year-ended March 2010 compared with a loss of Rs6.9 billion in 2008/09 year.
Kotak Investment Banking is representing Ispat on the deal, the sources said.
JSW declined comment. Ispat was not immediately available for comment.