Acquires 44% in co for Rs.292 cr
Tube Investments of India (TII), the flagship company of Murugappa Group, has bought the promoters? stake in Shanthi Gears, a listed entity manufacturing industrial power transmission products, gears and gear boxes, in an all-cash deal. The move comes amid rumours that companies such as Bharat Forge and Triveni Engineering were trying to acquire the Coimbatore-based gear box major.
TII on Friday signed a share-purchase agreement to acquire the full 44.1% stake of Shanthi Gears? promoters for a consideration of R292 crore (3,60,50,291 shares at R81 a share). The company will soon make an open offer to acquire 26% more for R172 crore (2,12,46,122 shares at R81 a share) in the company, taking its total acquisition cost to R464 crore. Shanthi Gears? share was hovering around R63.15, with a gain of over R3 a share or 4.99% over the previous closing price.
As of June 2012, HDFC Prudence and mid-cap funds together hold close to 8% in Shanthi Gears, while HDFC Standard Life holds little over 5%. Others, such as National Insurance, Geomatrix (HK) and Sundaram Smile Fund, together hold a little over 5.3% in the company.
When contacted, TII MD L Ramkumar said: ?We see TII can offering complete solutions on the metal-framing business front. The move will also help grow our non-auto businesses further. As of now, industrial/metal framing business contributes 25% to our total turnover, which would go up further by 6% to 7% with this acquisition.?
