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ShareMumbai/Kolkata: Employees of Balrampur Chini, says a rumour on the street, celebrated a 'second Diwali' late evening on Monday.
Were they celebrating the failure of Bajaj Hindusthan's attempt to buy out promoters' stake in their company? Sources would have us believe they were.
In a statement on Tuesday, Balrampur Chini refuted media reports about its promoters entering into an agreement for sale of their stake.
"However, some discussions were held with Bajaj Hindusthan Ltd on future business strategies," it said.
Bajaj Hindusthan, too, put out a statement: "The board has not considered and/or taken any decision in regard to the matter relating to acquisition of stake in Balrampur Chini from its existing promoters."
Sources said disagreements between the parties were over the mode of payment.
The promoters of Balrampur Chini are believed to have sought the entire payment in one go, whereas there were issues relating to Securities and Exchange Board of India clearances, putting money in an escrow account, and part-payments from the other side.
Bajaj Hindusthan's stock ended the day flat at Rs 196.55.
However, Balrampur Chini's stock dropped 10% to Rs 134.30 after the announcements came in. The Sensex ended the day down or 3.09% at 15404.94. The stock had outperformed the market in the month to October 30, with a gain of 21.93% as compared with a 7.18% loss for the Sensex.
According to India Infoline, the current price of Rs 135 discounts the company's June quarter annualised earnings per share of Rs 10.38 by a PE multiple of 13.
An industry observer, though, said it was too early to write off a deal. "These deals take time to fructify and companies are always open to negotiations after the initial overtures to sell or buy, whichever case it may be," he said.
