Grasim to buy 20% more stake in L&T via open offer route
By Our Corporate Bureau | 14 Oct 2002
Mumbai: Grasim Industries will pick up another 20 per cent stake in Larsen and Toubro (L&T) at Rs 190 per share aggregating Rs 945 crore through the open offer route shortly.
The much-anticipated decision was taken at Grasim's board meeting on 13 October 2002. Currently, Grasim holds 14.48 per cent stake in L&T. In the event the open offer goes through successfully, Grasim's stake will rise to 34.48 per cent. The cost of this open offer will be mainly met through internal accruals.
The open offer is slated to commence early December 2002. The acquisition of L&T shares will be done by Grasim and its wholly-owned subsidiary, Samruddhi Swastik Trading and Investments, acting in concert.
The offer price of Rs 190 per share is higher compared to the average price of Rs 174.93 per share over the last 26 weeks and Rs 170.08 over the last two weeks on the National Stock Exchange, which has the highest trading volumes for L&T.
“The initiative reflects Grasim's commitment to its strategic investment in L&T to enhance the long-term shareholder value in both the companies,“ says a press release.
“We are at the threshold of a 15-per cent stake position in L&T. Therefore, the open offer becomes mandatory. Besides, we wish to augment our stake and strengthen our position in L&T and in the process bring down the average cost of holding,“ says Grasim group executive president and CFO D D Rathi.
