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The Mint Report for 08 March 2011

The Mint Report for 08 March 2011
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First Published: Tue, Mar 08 2011. 09 43 PM IST
Updated: Tue, Mar 08 2011. 09 43 PM IST
The stage is set for Honda to finally get out of its alliance with the Hero Group. On Tuesday Hero Investments announced it had agreed to buy Honda Motor’s 26% stake in their joint venture Hero Honda. It will pay Rs739.97 per share. That amounts to about Rs3,842 crore. Which is a discount of around 50% on Tuesday’s closing price. Stocks of Hero Honda fell 0.77% on the BSE to close at 1518.15.
News of the deal had initially sent stocks of the company plunging even lower. Investors feared the low sale price meant Hero would have to compensate by paying higher royalties. Hero Investments is a special purpose vehicle set up by the Hero Group. And two investing firms, Bain Capital and GIC of Singapore are funding the deal.
The crisis looming over the UPA’s future has come to an end. Late on Tuesday, the Congress and DMK indicated they had resolved their differences. The two sides forged a deal in which the Congress would get to contest in 63 of Tamil Nadu’s 234 assembly seats. The state goes to the polls on13 April.
Markets made a partial recovery on Tuesday after the oil prices eased and on news that the Congress and DMK were working out their differences. The Sensex shot up 217 points to 18,440. And the Nifty went up 58 to 5,521.
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First Published: Tue, Mar 08 2011. 09 43 PM IST