Tata Steel’s open offer to the shareholders of Tata Sponge and Tinplate sent their stock prices zooming in the markets today.
Though Tata Sponge and Tinplate shares are still ruling lower than the acquisition price, it is difficult to gauge how much steam is left in these counters.
The company plans to hike its stake in Tata Sponge from 39.74 per cent to 51 per cent and in Tinplate, from 59.44 per cent to 73.44 per cent through the open offer. It is not making an offer to acquire the entire outstanding shares in the hands of non-promoters.
Tata Steel is making an open offer for acquisition of up to 14,653,470 shares at a price of Rs 60 a share from the shareholders of Tinplate Company of India Ltd forming 14 per cent of the share capital.
In the case of Tata Sponge, the offer will be for acquiring up to 1,734,040 shares at Rs 375 per share constituting 11.26 per cent of share capital.
The announcement has led to frenzied trading in both the counters in morning trade. Tata Sponge jumped Rs 37.90 or 12.36 per cent to Rs 344.45 on the BSE with about 1,77,765 shares being traded. The two week average volume in the counter in the exchange was a mere 5,855 shares.
In the case of Tinplate, the scrip zoomed to Rs 54.70, a gain of Rs 7.90 or 16.88 per cent. The trading volume was 5.06 lakh shares compared to 92,000 shares.