MUMBAI, March 26: Scrips of takeover targets crashed on the bourse on Thursday, sparking off a theory that the ongoing merger and acquisition (M&A) drive might prove abortive in most cases and that substantial overbought positions had been created in takeover scrips.Saurashtra Cement, for which an open offer has been made at Rs 75, crashed to Rs 50 and closed at Rs 53. Raasi Cement, the target of India Cements at a huge offer-price of Rs 300 per share, and Indian Aluminium, sought after by Sterlite Industries at Rs 115 per share, fell below their circuit breaker limits on the Bombay Stock Exchange. The market has virtually ignored the Autoriders' bid to acquire stake in Saurashtra Cement. As a result, Saurashtra scrip is quoting much below the offer price made by Autoriders.Raasi Cement closed at Rs 147.30, less than half of the India Cements' offer-price. The scrip had closed at Rs 181 on Wednesday, buoyed by hectic buying. A Rassi spokesperson told The Indian Express, "We would not like tocomment on what is happening at the stock markets. We are awaiting the outcome of the legal process." India Cements and Raasi Cement are locked in a legal battle over the the legality of the open-offer. The Andhra Pradesh high court is expected to deliver its final judgement on the case soon.Indal's crash was even more precipitate, despite an offer from Sterlite at Rs 115 and a simultaneous bid-defence offer of Rs 105 from single-largest shareholder Alcan Aluminium of Canada, the scrip crashed below Rs 100 to close at Rs 99.75, much lower than Wednesday's close of Rs 108.Market sources suggested that overbought positions in these scrips had prompted large-scale unloading by shareholders. Over the last few weeks, ever since the M&A front had witnessed unprecedented activity, the takeover target scrips had flared up.In fact, soon after Sterlite had announced an offer for a 20 per cent stake in Indal at Rs 90 per equity share, since revised upward, the Indal scrip had jumped to a high of Rs 125, close tothe scrip's 52-week high of Rs 142. This was partly due to the expectation of a huge counter-bid from Alcan Aluminium, which is the single-largest shareholder In Indal with a 34.6 per cent equity stake.
