Oberoi Hotels, the promoters of East India Hotels, which runs the The Oberoi and The Trident hotel chain, has been slowly hiking stake in their company for the past six months, Bombay Stock Exchange data shows.
The Oberoi Hotels have purchased 0.27% stake from the open market to 14.05% and its total promoter shareholding is now 34.61%.
Analysts say the move is to ring fence it from a takeover threat under the new Securities Exchange Board of India (Sebi) takeover norms. The Sebi code will trigger from October 22. EIH chairman PRS Oberoi had told shareholders his intention to hike stake in the company to 51% along with its new partner Reliance Industries , which owns a 14.8% stake in the company.
“This is a good move by the promoters and would boost confidence in the company for the investors,? said an analyst with a domestic brokerage. ?Promoters had offloaded stake and now want to consolidate their position.?
Last year, Oberois sold 14.8% stake to Reliance Industries for R1,021 crore to fend off a perceived takeover by rival ITC, which owns 14.98%. Analysts say a takeover fear is forcing Oberois to purchase stake from the market. “The promoters are increasing to avoid any hostile takeover bid by ITC and also thanks to the new takeover norms,? Rashesh Shah at domestic brokerage said. ?In the long term one cannot deny further increase of stake by RIL who has been brought in by EIH to ward off dangers from ITC.?
“We would not comment on market speculations,” said RIL spokesperson. The Oberoi Hotels spokesperson too did not respond to a email query.
Oberoi rival hotel chain ITC is keen to raise stake in EIH. ITC chairman Y C Deveshawar told shareholders that he was open to raising stake in EIH and Leela hotel chains, ?if the opportunity and price are good?, at the company’s annual general meeting in August. But, ITC, had time and again reiterated that it was not interested in a hostile takeover bid for EIH.