Kolkata: The founders of EIH Ltd, which owns and runs the Oberoi and Trident chains of hotels, said on Thursday they may sell a substantial stake to Analjit Singh, Max India Ltd promoter and chairman. They did not specify the amount of stake that could be sold.

Increased holding? Analjit Singh. Ramesh Pathania/Mint

EIH, however, told stock exchanges on Thursday that it was unaware of any share sale plans of its promoters. “Oberoi made the statement in his personal capacity," said EIH vice-chairman S.S. Mukherji. “The company has nothing to add at this moment."

Singh told CNBC-TV18 news channel that he was considering raising his stake in EIH, in which he already owns 4.3%.

The Economic Times reported on Thursday that the Oberoi family could sell shares to Singh, who would eventually secure a 26% stake. Singh and the Oberoi family would control 26% apiece, it said.

Singh said no decision has yet been taken on increasing his holding to 26%.

The Oberois and their associates hold 46.42% in EIH, according to the firm’s latest stock market filings. In the past nine years, cigarette maker ITC Ltd has built a 14.98% stake in EIH. ITC chairman Y.C. Deveshwar had told shareholders recently that though ITC was keen to explore ways of partnering EIH, it wouldn’t make an unsolicited bid to take over the group of hotels.

“We are not interested in a hostile takeover. Sometime, if the other side (EIH) wants to join hands with us, it (the stake) will come handy," Deveshwar said at ITC’s annual general meeting on 24 July.

ITC declined to comment on the latest development.

“It appears that the move (to sell shares to Singh) is primarily aimed at raising cash for a family settlement in a manner that wouldn’t weaken the Oberoi family’s control over the company," said a stock market analyst, who didn’t want to be named.

Despite strong denials by the Oberoi family and EIH officials, the stock market has been speculating for many years about a potential split between P.R.S. Oberoi’s son Vikram and nephew Arjun, who are joint managing directors of the firm. The Oberois hold their stake in EIH through jointly held investment firms, said an official of the company, who requested anonymity.

EIH’s shares rose 7.24% on Thursday to Rs136.25 on the Bombay Stock Exchange, on a day the benchmark Sensex index closed 36 points lower at 17,195 points.

After his company’s annual general meeting in Kolkata on 20 August, Oberoi had said EIH could be merged with EIH Associated Hotels Ltd—a joint venture of the Oberoi family and the Rajan Raheja group.

Merger with EIH Associated Hotels would have given the Rajan Raheja group, which has interests in construction, media, industrial batteries and cement, a substantial stake in EIH and considerably shored up the promoters’ holding.

Max India is a diversified coglomerate with business interests in specialty plastic products, healthcare, life insurance and clinical research services.