Fame shares keep rising as takeover battle rages
Fame shares keep rising as takeover battle rages
Mumbai: Shares of Fame India Ltd rose nearly 5% to close at Rs86.45 apiece on the Bombay Stock Exchange, a day after Reliance MediaWorks Ltd offered to buy a controlling stake in the Mumbai-based cinema chain operator, pitting its offer against that of Inox Leisure Ltd.
Since 8 February, when the tussle over Fame broke out, its shares have shot up 54.5% while Inox and the Sensex have increased by nearly 2%. Reliance MediaWorks has lost 5.5% in the same period.
“The Reliance offer is such that it puts very uncomfortable choices before Inox. Either it sells its stake and gets out. If it decides not to, then it either has to raise its offer price, which makes the acquisition rather expensive or live with a big minority shareholder on its back," said another city-based analyst with a domestic brokerage who did not want to be named.
The open offer of the film-making and distribution unit of the Reliance - Anil Dhirubhai Ambani Group, or R-Adag, will run concurrently with the Inox offer from 1-20 April.
As Inox has acquired a 50.5% stake in Fame, the R-Adag firm cannot get a controlling stake unless Inox sells at least part of the holding.
Crossing the 26% threshold will give Reliance MediaWorks a board seat, said the analyst quoted above, explaining “this could mean hostilities within the resultant top management. We don’t like the idea of managements with different ideological stances in one board."
bhuma.s@livemint.com
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