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Journalism of Courage
Courier firm Blue Dart Express shot up by 5.59 per cent to Rs 320.25 on the Bombay Stock Exchange (BSE) on Monday following the announcement that US courier giant DHL had acquired a 68.2 per cent stake in a deal worth Rs 600 crore.
In fact, the Blue Dart stock has been surging on the stock exchange even before the takeover deal was announced. The stock had surged by a whopping 43.7 pc from a low of Rs 211.05 on October 15 to Rs 303.30 on November 5. ‘‘This is a phenomenal rise. Some market players were playing in the stock on the merger developments. It’s very difficult to say insider trading was going on. The big rise indicates some market players knew what was going on in the company,’’ said BSE dealer Pawan Dharnidharka.
It’s now common to see market players indulging in insider trading before takeover or merger details are announced. Though market regulator Sebi had framed guidelines to check insider trading, market players were blatantly violating the norms, analysts said.
When contacted, Bryan Jamison, regional director for DHL, denied any insider trading. ‘‘I presume there has been speculation floating around which is mostly media-driven, for quite some time. The speculation started as far as 1992 when both entered into a sales alliance,’’ Jamison said.
‘‘I do not know of any insider trading. All I know is we have entered into a strategic deal after negotiations with founding members of Blue Dart and Newsfields holdings on Saturday and now await for the normal regulatory procedures post a deal. The deal should be in action by Q1 2005, when we will be controlling between 68 per cent to 88 per cent stake,’’ Jamison said.
Meanhile, Blue Dart said its Indian promoters and Newfields Holdings have entered into separate definitive sale/purchase agreements to sell their equity shares, collectively constituting 68.21 pc of the total current post issue paid up equity share capital, at Rs 350 per share to DHL Express (Singapore) Pte. The price of the acquisition is at a 9.4 per cent premium to the current ruling market price of Blue Dart, of Rs 319.70. DHL will make an open offer for acquisition of additional 20 pc shares in Blue Dart as per Sebi guidelines on takeovers.
Blue Dart already has a sales alliance with DHL. With a 39 pc market share in South Asia, it operates in India, Bangladesh, Bhutan, Nepal, and Sri Lanka.
