The Hindu Business Line : Open offer expectations lift Cairn India

The stock of Cairn India has been gaining, accompanied by a strong surge in trading volumes. The stock hit its all-time high of Rs 342.50 on the BSE on Wednesday, but closed marginally weaker at Rs 327.25 against the previous day’s close of Rs 327.85. Trading volumes jumped to 96.92-lakh shares against its two-week average volumes of 62.69-lakh shares.

Even in the F&O segment, the stock has been witnessing sharp accumulation in open interest positions. According to marketmen, there has been speculation that at the global level, Eni SpA of Italy might go in for a hostile bid for Cairn Plc, the parent company of Cairn India, for quite sometime. Now, the talk is that both are inching towards a deal.

Cairn Energy plc is holding 68.96 per cent stake in the Indian arm. If Eni succeeds in taking over Cairn Plc, then it has to come out with an open offer for Cairn India, according to the SEBI regulations.

Eni, an integrated energy company, committed to developing its activities in research, production, transport, transformation and marketing of oil and natural gas, earlier said it’s interested in India. Cairn India, thanks to its recent finds in Rajasthan, is sitting on huge oil reserves. However, Eni and Cairn Energy plc, in an e-mail response to Business Line declined to comment on market rumours.

The stock of Cairn Energy plc jumped about 21.75 per cent in the last one month. Earlier this year, Eni Holding completed its acquisition of Burren Energy plc and thereby indirectly purchased a 27.17 per cent interest in Hindustan Oil Exploration Company. Following which, it came out with an open offer to pick up 20 per cent stake in the company. The open offer is set to begin on June 11.

K.S. Badri Narayanan

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