Mumbai: Shares in GMR Industries Ltd rose as much as 7.1% on Monday after EID Parry, a south India-based sugar maker, said it will acquire up to 65% in the former.
EID Parry is set to acquire up to 12.98 million shares, or 65%, at Rs57.35, after which it will make an open offer to shareholders for 3.99 million shares, or 20%, at Rs110.69 each, it told the stock exchanges on Monday.
GMR Industries owns and operates three sugar complexes in Andhra Pradesh and Karnataka with a combined installed crushing capacity of 11,000 tonnes per day (TCD), 46 megawatt co-generation and a 95 kilo litres per day distillery, it said.
“The (GMR) group would like to divest the non-core assets and move to the infrastructure space and handover to new acquirer who has core activity in this business,” R Ramakrishnan, managing director of GMR Industries told Reuters over the telephone.
“They’d probably take it further and grow the company,” he added. GMR group has interest in airports, energy, highways and urban infrastructure.
Ramakrishnan pegged the enterprise value of GMR at Rs650 crore including the debt and equity position.
Officials at EID Parry could not be reached for a comment immediately.
Rothschild was the sole financial advisor to GMR Group on the transaction, the two companies said in a joint statement over the weekend.
EID Parry, which acquired Karnataka-based Sadashiv Sugar late last year, posted a 12% rise in net profit for the quarter-ended March 2010 to Rs105 crore on net sales of Rs320 crore.
At 10.04 am, shares in EID Parry were up 3.32% at Rs378.5, off a high of over 6% hit in early deals. GMR Industries was up 5.6% at Rs118.20.