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The stock of Wheels India surged 15.4 per cent or Rs 114 to a life-time high on the BSE, after one of its promoters made an open offer to buy 14.38 per cent stake from public shareholders.
Wheels India opened at Rs 815.05, a gain of Rs 74.95 or 10 per cent.
Titan Europe Plc. along with Titan International Inc. has made an open offer to buy 14.38 per cent stake in TVS group company Wheels India for about Rs 103 crore.
Titan Europe already holds 35.91 per cent (35.44 lakh shares) in Wheels India. The open offer for public shareholders is being made following foreign promoter Titan International’s acquisition of Titan Europe Plc.
Foreign promoter's stake
TVS group may lose control in Wheels India if Titan International group receives full response to its open offer to the public shareholders of the auto ancillary company.
The foreign promoter had informed the BSE on Thursday that it will acquire 14.19 lakh equity shares (face value Rs 10 each) of Wheels India at an offer price of Rs 725.38 a share.
If the foreign promoter succeeds in mopping up the entire public shares, TVS group will lose control over Wheels India, as the foreign promoter’s stake could rise to 50.29 per cent.
As against this, TVS group through T.V. Sundram Iyengar & Sons Ltd, Sundaram Finance Ltd and Southern Roadways Ltd held 49.7 per cent stake in the company, according to September 2012 shareholding pattern.
However, it would be interesting know how Reliance Mutual Fund, which holds 3.83 per cent stake, and 200 bodies corporate, which have 1.3 per cent stake, will respond to the offer.
Meanwhile, Wheels India’s board of directors is meeting today to consider, discuss and approve the raising of equity capital.
ICICI Securities Ltd is the manager to the offer.
Offer price
Since this open offer is being made as a result of indirect acquisition of shares/control of the target company, the offer price shall be revised, according to SEBI regulations; the revised price shall be included in the detailed public statement, said the announcement to the stock exchange.
The offer price will be paid in cash.
Titan Europe Plc is an international engineering group which designs and manufactures wheels, undercarriage components and assemblies for tracked and wheeled off-road vehicles.
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