Videocon Industries has decided to stick to its investment of 3% in Great Offshore and not go for an open offer. However, on Thursday, the company?s chairman Venugopal Dhoot was aggressively looking forward to either sell the stake or come up with an open offer, and for the purpose scheduled a meeting with financiers on Friday.
Dhoot told FE, ?Videocon does not want to go for an open offer but would stick to its strategic investment of 3% in Great Offshore. This decision is the final outcome of a meeting on Friday with private equity players.?
Great Offshore?s shares on Bombay Stock Exchange rose 2.24% to Rs 422.40 on Friday afternoon.
In the meantime, Bharati Shipyard?s board is supposed to meet on June 30, mostly to decide on the revised price for their open offer.
ABG Shipyard is, however, waiting for Bharati?s next move. When contacted, Dhananjay Datar, CFO of ABG Shipyard, told FE, ?We will decide our strategy depending on what Bharati decides on June 30. We don?t see any reason to react right now. We will wait till next week and then only decide on our path going forward.?
Great Offshore is in the midst of a battle between Bharati Shipyard and ABG Shipyard for acquiring controlling stake in the oilfield services provider.
After acquiring an additional 5% stake in Great Offshore through open market transactions on Tuesday, Bharati, which had also announced an open offer at Rs 344 a share, had hinted at revising its offer price upwards, above Rs 403 a share.
It did so to counter a bid on the same day by ABG Shipyard, which announced an offer at Rs 375 a share for around 32% stake.
According to analysts, with oil price being around $70 a barrel, the offshore oilfield service space is seen as a lucrative business for shipbuilders, and both the shipyards are seeing Great Offshore as a lucrative opportunity. However, industry experts feel that Bharati could be in a better position since it already holds around 19% stake in Great Offshore, and the cost of acquisition for Bharati will be lower as compared with ABG Shipyard.
?Companies need to make sure that going forward, there should be proper synergies. Moreover, the bidders should go for it in a realistic way so that proper integration happens,? said Arvind Mahajan, executive director, KPMG.