Open offer for Wartsila commences

Our Markets Bureau

Mumbai, Oct 8: The open offer by the Finland-based Wartsila Corporation to purchase 49-per cent public holding in its Indian subsidiary Wartsila India Limited (WIL) opened on Monday. The offer closes on November 6, 2001.

The offer price of Rs 120 per one Rs 10 share of WIL is at a premium of 62.50 per cent over the Securities and Exchange Board of India (Sebi) mandated price of Rs 73.84. On Monday, on The Stock Exchange, Mumbai (BSE), the WIL shares in thin demand clocked trading volume of only 3,807 shares. The stock closed at Rs 117.65 from the previous close of Rs 117.50. On the National Stock Exchange (NSE), WIL shares clocked turnover of 13,367 shares and closed almost unchanged at Rs 117.80.

Wartsila Corp has a 51-per cent stake in WIL. It has made the open offer for 58,96,700 shares representing 49 per cent of total equity of WIL from the existing public shareholders at a price of Rs 120 per share, which, if fully subscribed, will enhance its holding to 100 per cent in the Indian subsidiary and lead to the delisting of the company.

Investment banking sources say, in such cases, the parent company is not able to get the full targetted shares, and therefore, Wartsilla Corp’s offer is considered to be the first one.

Further consolidation of parent holding in WIL will enhance its competitiveness with greater management focus and technology absorption, the company claimed in a statement.

Wartsila Corp has thus decided to provide an opportunity to shareholders to make an appropriate choice under the prevailing market conditions.