Billionaire Mukesh Ambani-led Reliance Industries has denied a report that it is looking to increase its stake in Oberoi group's EIH Ltd by picking up shares from FMCG giant ITC.
Billionaire Mukesh Ambani-led Reliance Industries has denied a report that it is looking to increase its stake in Oberoi group’s EIH Ltd by picking up shares from FMCG giant ITC. Notably, Reliance Industrial Investments and Holdings Ltd, a wholly-owned subsidiary of Reliance Industries, currently holds around 10.59 crore shares amounting to 18.53% stake of EIH as at the end of June quarter. According to ET Now, FMCG giant ITC (which owns 16.13% stake) is mulling to exit its investment in EIH partly and RIL has “sent feelers” to pick up stake, the channel reported citing sources. Notably, Reliance Industries can buy up to 6% stake without triggering the mandatory open offer. “Mukesh Ambani wants to buy ITC’s full stake of 16.13% but with the blessing of PRS Oberoi,” ET Now reported sources as saying. A Reliance Industries spokesperson has denied the news. “The information you have received is not true and there are no plans to increase stake,” RIL spokesperson told Financial Express Online. EIH Ltd shares closed 0.46% higher at Rs 164.50 on BSE.
Reliance Industries had picked up around 14% stake in Oberoi Group’s EIH Ltd to quell ITC’s hostile takeover attempt. ITC’s hostile takeover attempt was made under the leadership of YC Deveshwar, who passed away recently. In 2010, veteran hotelier PRS Oberoi had roped in Mukesh Ambani’s RIL as a white knight to thwart a hostile takeover by ITC, then headed by Deveshwar. Prithvi Raj Singh Oberoi, chairman of EIH had announced in 2010 that he and his family had sold 55.4 million shares, a 14.12% stake in the company, to an investment arm of Reliance Industries Ltd (RIL), for Rs 1,021 crore. Currently, RIL’s stake stands at 18.53%.
Nine years later, ITC under the Chairmanship of Sanjiv Puri is believed to be reviewing its investment in The Oberoi Group and EIH. “The new leadership under Sanjiv Puri is looking to consolidate its hotel business,” the channel reported, citing sources. Accordingly, ITC is now looking to pare its stake partly, as it does not see any major upside, said the report. Meanwhile, Oberoi Group told the channel that it does not comment on market speculation.