The battle for control of Great Offshore is hotting up with ABG Shipyard hiking the offer price again to Rs 520 a share after making a series of bulk and block purchases at Rs 450 recently, according to Exim News Service.
ABG Shipyard said on August 4 that it bought 1.5 lakh shares (0.4 per cent) in Great Offshore at a maximum price of Rs 519.94 a share through separate deals. The average price paid was Rs 498.39 a share. These purchases have raised ABG’s stake in Great Offshore to around 8.3 per cent from 2.02 per cent earlier.
Bharati Shipyard had originally offered Rs 315 per share for the 14.89 per cent pledged shares of Great Offshore in May, and further revised it to Rs 408 and Rs 405 on ABG’s counter offer. Bharati already holds 19.47 per cent in Great Offshore. Bharati Shipyard’s open offer opened on July 25, and will close on August 13, whereas ABG Shipyard’s open offer opens on August 13 and will close on September 1.
Bharati needs just 6 per cent to become a 26 per cent shareholder and that will give it the power to block special resolutions.
At Rs 520 a share, ABG’s latest offer is 28 per cent higher than Bharati Shipyard’s revised offer of Rs 405 a share made on July 6.
Last month, Great Offshore found itself at the centre of a takeover battle after ABG Shipyard, through its fully-owned subsidiary, Eleventh Land Developers, made an open offer to acquire 31.12 per cent stake in the offshore services firm at Rs 375 a share, 9 per cent higher than Bharati’s offer price of Rs 344.
"The valuations have certainly got expensive. Bharati Shipyard does not have much of a choice, it has significant order book exposure to Great Offshore, which will compel it to go for revising the price further," an analyst said.
With increased deep-water exploration activities, the offshore oilfield service space is seen as a lucrative business for shipbuilders as part of their backward integration initiative.
But analysts pointed out that ABG and Bharati are struggling to get new orders for building ships. Once the present orders get exhausted, they may face a huge crisis.
ABG Shipyard had said last month that it would mobilise around Rs 165 crore from internal resources, and it had organised a line of credit of Rs 310 crore from IL&FS.