Monnet, on February 25, made an open offer to buy 61 lakh shares, or 20% stake, in Orissa Sponge at Rs 310 per share.
As if the war between estranged brothers Neeraj Singhal of Bhushan Steel and Sanjay Singhal of Bhushan Power wasn’t enough, Delhi-based Monnet Ispat has also joined the race for Orissa Sponge Iron and Steel Ltd.
Monnet, on February 25, made an open offer to buy 61 lakh shares, or 20% stake, in Orissa Sponge at Rs 310 per share. It made the offer through group company Mounteverest Trading and Investment Ltd, which already holds 14.85% stake (29.9 lakh shares) in Orissa Sponge. Monnet’s offer will open on April 4 and close on April 23.
The bid is bigger than Bhushan Power’s earlier bid for 26% stake at Rs 300 a share. Calls to VR Sharma, the joint managing director of Bhushan Power, went unanswered.
Bhushan Steel, too, is readying for an open offer in a couple of days. Nittin Johari, director (finance), Bhushan Steel, said, “We will make an offer for 20% stake but the price hasn’t been decided yet.”
As of December 31, 2008, the promoters of Orissa Sponge held 41.51% stake in the company. The remaining stake was with non-promoters.
On February 24, Monnet Ispat bought 54.2 lakh shares from two Orissa Sponge promoters — Torsteel Research Foundation (TRF) and TRFI Investments — for Rs 283 a share. The 27.1% stake was bought for Rs 153 crore. The open offer is in line with Securities and Exchange Board of India (Sebi) guidelines, which require a company to make an open offer for at least 20% stake if it increases its share in the target company to 15% or more.
So far, the war for Orissa Sponge was restricted to the two Singhal brothers. On February 9, Sanjay Singhal-promoted Bhushan Power, which doesn’t own any stake in the company, made an open offer to buy 26% stake at Rs 300 per share. Bhushan Power is looking to buy 52 lakh shares beginning April 3.
Earlier on January 29, Bhushan Steel’s Neeraj Singhal bought 9.5% in Orissa Sponge from Delhi-based real estate developer Unitech Ltd, taking his total stake to 14.8%. Bhushan Steel also acquired 35 lakh warrants of Orissa Sponge, the deadline for the conversion of which is June. Post this conversion, Bhushan Steel’s stake in Orissa Sponge will rise to 21%, leading to another open offer. However, due to the Bhushan Power open offer, it will now have to submit a competitive bid before February 28.
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