Gesco bidders likely to begin talks

MUMBAI,JAN 1: The two sides - the Sheths-Mahindras combine and the AH Dalmia group - battling for control of construction firm GESCO Corpo...

MUMBAI,JAN 1: The two sides – the Sheths-Mahindras combine and the AH Dalmia group – battling for control of construction firm GESCO Corporation, are likely to begin negotiations very soon on the options before them, in a move to end the bidding war. The battle for control of the company is seen ending shortly since it now makes little sense for the two sides to continue fighting it out in a situation where there’s little difference between the two bid prices.

Stockmarket sources said on Monday that talks between the two sides were the only option under the circumstances, where the difference in prices of the two bids was only Re 1. “The two sides are bound to explore options in such a situation," the sources said.

Sensing that the bidding war may end soon, the GESCO stock lost ground on the bourses on Monday’s trading, dipping 5.66 per cent on the Bombay Stock Exchange to close at Rs 44.10 from last Friday’s close of Rs 46.75. On the National Stock Exchange, the stock closed at the same price as that of BSE, down 4.33 per cent from its last Friday’s close of Rs 46.10. Volumes were thin as well, with 6000 shares being traded on BSE and 9,900 shares changing hands on NSE.

The Dalmias were the last to increase their price for 45 per cent of GESCO, upping it to Rs 45 per share from the earlier Rs 27. The Sheths-Mahindras combine has offered Rs 44 per share for 33.5 per cent of the company, and had bought out International Finance Corporation’s 6.34 per cent stake. The market now feels it’s a matter of time before talks are held on how the two sides can get out of this stalemate.

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