ABG, Bharati vying for Great Offshore

Updated: Jun 30 2009, 04:34am hrs
A bitter battle to take control of Great Offshore Ltd kicked off on Tuesday, with ABG Shipyard Ltd, which holds a little over 2% stake in the offshore services firm, making an offer for 32.12% of Great Offshores stake at Rs 375 a share. This is at 9% premium to Bharati Shipyard Ltds earlier offer of Rs 344 for a 20% stake in Great Offshore, after buying 14.89% from Great Offshore promoter Vijay Sheth for Rs 315 a share in May.

In a day of high drama, Bharati Shipyard countered ABGs offer with a Rs 403 per share offer. Bharati also raised its stake in Great Offshore by buying another 4.58% from the Sheth family, taking its total stake to 19.47%. With this and the open offer, Bharatis stake in Great Offshore should go up to around 40%. ABG, meanwhile, indicated it will revise its offer, but no announcement came in till late Tuesday evening.

ABG said it along with Eleventh Land Developers offered to buy 1,25,71,072 shares, or 32.12% stake in Great Offshore. The counter-offer will open on August 13 and close on September 1. ABG plans to fund the offer through internal accruals. Bharatis open offer will begin on July 25 and close on August 13.

Meanwhile, Videocon group chairman Venugopal Dhoot, who holds around 3% stake in Great Offshore, said the fair price for Great Offshore is Rs 600 a share, and bids may touch that level driven by likely higher bids.

Rs 375 a share (offered by ABG Shipyard in its counter-offer) is too low. The right price for Great Offshore is Rs 600 rupees (a share). The enterprise value of the company is Rs 2,500 crore, based on five times the Ebitda, Dhoot was quoted by a news agency. He, however, said Videocon will not sell its stake in Great Offshore for the next two years.

Both ABG, Indias biggest private yard, and Bharati, the second-biggest, want to buy Great Offshore as demand increases for drill ships and other offshore structures.

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