Bharati to Raise Great Offshore Offer, Countering ABG
June 23 (Bloomberg) -- Bharati Shipyard Ltd., locked in a bidding war with ABG Shipyard Ltd. for Great Offshore Ltd., said it will top its rival's offer for the Indian drilling company.
Bharati, which holds 14.89 percent of Great Offshore after buying the stock pledged with it last month, will revise its offer price to more than 403 rupees ($8.3) a share, Managing Director P.C. Kapoor told reporters in Mumbai today, without giving the new price. Bharati bought 4.58 percent of Great Offshore from the founders today at that price, he said.
Both ABG, India's biggest non-state yard, and Bharati, the second-biggest, want to buy Great Offshore as demand increases for drill ships and other offshore structures. Depleting crude reserves are prompting oil companies to search for resources in deeper and unexplored waters.
"We have raised our equity share holding as we feel it is a strategic long-term investment," Kapoor said. "Irrespective of the ABG Shipyard offer, we will stay invested."
Great Offshore rose to its highest in almost nine months to 413.85 rupees at close in Mumbai today. ABG rose 1.8 percent to 214.15 rupees, while Bharati fell 5.1 percent to 162.3 rupees. The key Sensitive Index was little changed.
Bharati must revise its offer for Great Offshore within 14 days, as per rules set by India's stock market regulator. The company may need as much as 3 billion rupees to enhance its offer and will use its own cash, Kapoor said.
"We hold 1 billion rupees cash in fixed deposit," he said.
Bharati has no plans to place any officials on the board of Great Offshore, Kapoor said.
'Good Friends'
"The present management is doing well under Vijay Sheth and that will continue," he said. "Sheth family is good friends of ours. This is not a hostile takeover situation."
ABG, which owns about 2.5 percent of Great Offshore, offered to pay 375 rupees a share for an additional 33.85 percent stake, it said in an advertisement today. ABG will use its own funds and debt to buy the stake, Chairman Rishi Agarwal said today at a press conference.
SBI Capital Markets Ltd. is managing Bharati's offer, while Kotak Mahindra Capital Co. is advising ABG.
Bharati offered to acquire an additional 20 percent stake in Great Offshore on June 3 for 344 rupees a share. A 15 percent stake purchase in a company triggers a mandatory open offer by the acquirer, according to Indian guidelines.
To contact the reporters on this story: Paresh Jatakia in Mumbai at pareshj@bloomberg.net Debarati Roy in Mumbai at droy5@bloomberg.net
June 23 (Bloomberg) -- Bharati Shipyard Ltd., locked in a bidding war with ABG Shipyard Ltd. for Great Offshore Ltd., said it will top its rival's offer for the Indian drilling company.
Bharati, which holds 14.89 percent of Great Offshore after buying the stock pledged with it last month, will revise its offer price to more than 403 rupees ($8.3) a share, Managing Director P.C. Kapoor told reporters in Mumbai today, without giving the new price. Bharati bought 4.58 percent of Great Offshore from the founders today at that price, he said.
Both ABG, India's biggest non-state yard, and Bharati, the second-biggest, want to buy Great Offshore as demand increases for drill ships and other offshore structures. Depleting crude reserves are prompting oil companies to search for resources in deeper and unexplored waters.
"We have raised our equity share holding as we feel it is a strategic long-term investment," Kapoor said. "Irrespective of the ABG Shipyard offer, we will stay invested."
Great Offshore rose to its highest in almost nine months to 413.85 rupees at close in Mumbai today. ABG rose 1.8 percent to 214.15 rupees, while Bharati fell 5.1 percent to 162.3 rupees. The key Sensitive Index was little changed.
Bharati must revise its offer for Great Offshore within 14 days, as per rules set by India's stock market regulator. The company may need as much as 3 billion rupees to enhance its offer and will use its own cash, Kapoor said.
"We hold 1 billion rupees cash in fixed deposit," he said.
Bharati has no plans to place any officials on the board of Great Offshore, Kapoor said.
'Good Friends'
"The present management is doing well under Vijay Sheth and that will continue," he said. "Sheth family is good friends of ours. This is not a hostile takeover situation."
ABG, which owns about 2.5 percent of Great Offshore, offered to pay 375 rupees a share for an additional 33.85 percent stake, it said in an advertisement today. ABG will use its own funds and debt to buy the stake, Chairman Rishi Agarwal said today at a press conference.
SBI Capital Markets Ltd. is managing Bharati's offer, while Kotak Mahindra Capital Co. is advising ABG.
Bharati offered to acquire an additional 20 percent stake in Great Offshore on June 3 for 344 rupees a share. A 15 percent stake purchase in a company triggers a mandatory open offer by the acquirer, according to Indian guidelines.
To contact the reporters on this story: Paresh Jatakia in Mumbai at pareshj@bloomberg.net Debarati Roy in Mumbai at droy5@bloomberg.net
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