Shares of Tata Tea surge on acquisition report

Shares of Tata Tea surge on acquisition report
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First Published: Tue, May 22 2007. 11 27 AM IST
Updated: Tue, May 22 2007. 11 27 AM IST
PTI
Mumbai: Shares of Tata Tea surged nearly 2% or Rs15 in early trade, amid reports that Coca-Cola has made a pre-merger filing with the US anti-trust regulators regarding a possible acquisition of energy drink maker Glaceau, in which India’s Tata Group holds a 30% stake.
After opening at Rs848.75, Tata Tea rose to Rs855, gaining 1.8% on the Bombay Stock Exchange.
The scrip was last trading at Rs840.70, marginally up over yesterday’s closing price of Rs840.30.
Similarly on the National Stock Exchange, Tata Tea rose to Rs852, gaining around Rs15 or 1.75 per cent in the morning, according to latest data.
The shares were last trading at Rs841.50, a shade higher than yesterday’s close of Rs841.40.
According to media reports, Coca-Cola has filed a pre-merger Hart-Scott-Rodino Act (HSR) notification with the Federal Trade Commission.
The filing is necessary for deals of significant size under anti-trust regulatory framework, which seeks to prevent merger and acquisitions that could reduce competition, lead to higher prices, lower quality of goods or services, or decreases innovation.
Glaceau, in which Tata Tea had acquired a 30% stake for $677 million (Rs2,749 crore) in August last year, was reported to be on Coke’s takeover radar earlier last month.
Based on the price of Tata’s acquisition, New York-based Glaceau could be valued at close to $2.25 billion.
However, the market speculations have put the value of the deal anywhere between $3 billion to $4 billion.
The earlier reports had sent shares of Tata Tea soaring by close to 15% on the Indian bourses on 25 April.
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First Published: Tue, May 22 2007. 11 27 AM IST
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