Uttam Galva stock soars above open-offer price

Even as ArcelorMittals public offer for 29.4 per cent stake in Uttam Galva Steels opened on Monday,its shares shot up by...

Even as ArcelorMittals public offer for 29.4 per cent stake in Uttam Galva Steels opened on Monday,its shares shot up by another 10 per cent to Rs 125.05 on the Bombay Stock Exchange on Monday. As this is nearly 4.2 per cent more than the open-offer price of Rs 120 a share,market observers are skeptical that investors will surrender their shares to the L N Mittal company.

The profile of Uttam Galva has changed overnight and the scrip is now witnessing a re-rating,analysts said. As per the agreement between the two sides,in the event of open offer made by ArcelorMittal Netherlands being under-subscribed,the Miglani family should offer ArcelorMittal Netherlands such number of shares so as to ensure that the relative shareholding of both the co-promoters is equal 22.5 per cent.

Though ArcelorMittal announced the deal only after the market closed for trading on Friday,the scrip had shot up by 10 per cent earlier anticipating a big announcement. Its open offer price represents a 27 per cent premium over the two weeks share price weighted average and 85 per cent over the six months volume weighted average.

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Clearly some people in the market knew that some big announcement was coming. There was no other reason for the stock to flare up by 10 per cent on Friday. Price sensitive information should be disseminated to all investors. It should not be exclusive to some investors alone, said a market observer.

The Uttam Galva scrip has flared up by 110.8 per cent in the last one month. On August 7,2009,the scrip was at Rs 59.30 on the BSE.

In another interesting development,Anuj Rajinderkumar Miglani picked up 12 lakh shares or 1.05 per cent stake in the company at Rs 125 a piece,aggregating to Rs 15 crore,according to the bulk trade data available on the BSE. Sainath Trading Company has sold 18,00,000 shares of Uttam Galva totalling to Rs 22.50 crore.

ArcelorMittal offer to begin on October 31

New Delhi: India-origin billionaire Lakshmi Mittal-led ArcelorMittal on Monday made an offer to buy an additional 29.4 per cent stake in domestic steel firm Uttam Galva Steel at Rs 120 a share. In a public announcement made to shareholders,ArcelorMittal said its open offer would begin on October 31,and close on November 19,2009. This follows ArcelorMittals announcement to snap up a 35 per cent stake in Uttam Galva through a mixed route of share purchase from existing promoters and open offer. Total consideration payable would be up to Rs 422.71 crore. The offer is being made to all Uttam Galva shareholders to acquire over 3.52 crore shares that form 29.39 per cent of the existing voting capital at a price of Rs 120 a share,it said. PTI

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