Daimler may sell its stake in Tata Motors1 min read . Updated: 08 Mar 2010, 10:31 PM IST
Daimler may sell its stake in Tata Motors
Mumbai: German auto maker Daimler AG may be offloading its remaining stake of less than 6% in Tata Motors Ltd, according to a sale document. As many as 25.6 million shares in the Mumbai-based company are being offered at Rs737.4 to Rs761.3 apiece in a block deal that is to be completed tomorrow, according to the term sheet.
Citigroup Inc. is managing the sale. Tata Motors spokesperson Debasis Ray didn’t respond to calls.
“These are all rumours and we are not commenting," said Florian Martens, Daimler AG spokesperson, speaking to Mint on the phone from Stuttgart, Germany.
The association goes back to 1954 when Tata Motors entered into a technical agreement with Daimler-Benz for the manufacture of light trucks.
The licensing agreement came to an end in the late 1960s and Tata Motors began making commercial vehicles at its facility in Pune. Daimler kept its 15% stake in the company even after the technical agreement ended. Over the years, as Tata Motors’ equity has expanded with the company raising funds to pay for Jaguar Land Rover, Daimler’s stake has dropped to below 6%.
Since Budget day, 26 February, Tata Motors has risen 12.05%, compared with a 4.1% increase in the benchmark Bombay Stock Exchange Sensitive Index.
The shares have rallied on the back of robust third-quarter earnings which included Jaguar Land Rover, said Umesh Karne, analyst at BRICS Securities Ltd. “The deal will not have any fundamental impact on Tata Motors’ stocks," he said.
Bloomberg contributed to this story.