BS Srinivasalu Reddy

Mumbai, June 3: BRIGHT Star Investments of the Mumbai-based stock brokers GS Damani and RS Damani has upped the ante by hiking its offer price for stake in cigarette major VST Industries to Rs 151 per share from the earlier offer of Rs 118 and against the Rs 125 per share offered by Russell Credit, a 100 per cent subsidiary of ITC Ltd.

Damanis have also increased their offer size from the earlier 20 per cent to 30 per cent, according to Mr John Band, CEO of ASK Raymond James & Associates, advisors to Damanis in the open offer.

“By Saturday evening, the deadline for hiking the counter-open offer price by Russell Credit has expired. Now, they don’t stand any chance to make a higher counter offer to the latest offer by Bright Star,” Mr Band told The Financial Express. The Bright Star offer was revised on Saturday night. When contacted, Securities and Exchange Board of India (Sebi) officials said: “We will look into the issue (of the eligibility of Russell Credit to hike its offer price) only tomorrow. We have not yet gone through the papers filed by them, if any.” Mr Band said: “The significance of hiking the offer size was to give the VST shareholders a better scope of acceptance of shares by the Damanis.”

Russell Credit had hiked its offer price from Rs 115 to Rs 125 on May 31.

The Damanis’ offer for 20 per cent stake in the Hyderabad-based cigarette major VST Industries in February 2001 gained significance mainly because the offer, if subscribed fully, would have made Bright Star the largest shareholder in the company, pipping the multinational cigarette major British American Tobacco (BAT) to the post. BAT is also the largest shareholder in ITC Ltd, holding over 32 per cent stake. Bright Star was holding nearly 15 per cent stake in VST before making the takeover bid.

On June 1, the Delhi High Court had vacated the stay on Russell Credit’s counter offer for a 20 per cent stake in VST Industries Ltd, paving the way for the company to continue its battle for higher stake in the VST.

A Varanasi-based cigarette dealer, Mahavir Prasad of Golden Tobacco Company, had filed a case against Russell’s open offer alleging suppression of facts.

He had also alleged that if Russell was allowed to go ahead with the open offer and allowed to mop up 20 per cent stake in VST, then British American Tobacco Plc of UK, which holds 38 per cent in ITC and 32.16 per cent in VST, will be indirectly controlling VST also.