Open offer rumour fuels ACC scrip

MUMBAI, NOV 2: The stock markets are agog with rumours that Gujarat Ambuja Cements is planning to make an open offer for cement major ACC ...

MUMBAI, NOV 2: The stock markets are agog with rumours that Gujarat Ambuja Cements is planning to make an open offer for cement major ACC to increase its stake by another 20 per cent. In a controversial move, GACL had bought the Tata stake in two tranches but did not make an offer open to ACC shareholders.

Stock brokers say ACC8217;s scrip shot up on the Bombay Stock Exchange BSE and crossed the Rs 100-barrier on Friday after languishing for a long time. Though the Sekhsarias, promoters of GACL, have overstretched themselves by giving a hefty amount to the Tatas for their ACC stake, an open offer will consolidate their position in the company. Gujarat Ambuja currently holds a 14.4 per cent stake in the cement major and if they want to increase their stake beyond 15 per cent, they have to make an open offer for ACC shareholders as per Sebi Guidelines.

Considering the low price of the scrip, the company is also a sitting duck for corporate raiders who can make an open offer to ACC shareholders and snatch the company away from Gujarat Ambuja. Hence, the need to increase stake.

On Thursday, ACC closed at Rs 99.90 gaining nearly 3 per cent on a huge volume of 33 lakh shares. With this, the ACC share price gained 7.22 per cent in the last couple of trading sessions from Rs 93.45 on Tuesday to the current levels. When contacted, a senior ACC official denied any move by GACL to increase its stake.

The Tatas had earlier exited from the cement major by selling their entire stake in ACC in favour of the Ambuja group. The stake sale was in three phases over the last 10-11 months at a price of Rs 370 per share. Sebi had ruled that GACL need not make any open offer as there were no change in management.

The Ambuja group holds the ACC stake through its subsidiary Ambuja Cement India ACIL. Shares of Gujarat Ambuja Cement also flared up as the scrip went up 4.11 per cent to Rs 140.50 on a volume of over 7 lakh shares. It later closed at Rs 138.05.

The share prices went up despite ACC has posted a net loss of Rs 15.53 crore for the quarter ended September 30,2000 as against a net profit of Rs 1.67 crore in the corresponding period last fiscal. Net sales for the quarter rose by seven per cent to Rs 674.51 crore as against Rs 628.97 crore for the corresponding quarter last year.