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Mumbai, June 25 ABG Shipyard Ltd will revise its offer price for Great Offshore after Bharati Shipyard announces its offer price next week, said an ABG official.

“We will wait and watch Bharati’s offer which will be made next week. There is no rationale in reviewing the price now,” Mr Dhananjay Datar, Chief Financial Officer, ABG Shipyard Ltd, told Business Line.

Interestingly, both the offers — ABG’s and Bharati’s — run parallel till the end of August.

“Let them hike the price, till that time we have ample time to devise a strategy,” Mr Datar said.

He said the offers are not strictly comparable, as ABG wants to buy a 32 per cent stake while Bharati is interested in a 20 per cent stake.

On Tuesday, Great Offshore found itself in a centre of a takeover battle, after ABG Shipyard through its fully owned subsidiary, Eleventh Land Developers, made an open offer to acquire 32.12 per cent stake in offshore services firm at Rs 375 a share, 9 per cent higher than Bharati’s offer price of Rs 344 a share.

Bharati acquired a 4.58 per cent stake in the company through a block deal at Rs 403 a share, which automatically raised its open offer price (as per Securities and Exchange Board of India regulations for determining the open offer price).

Great Offshore shares fell 1.45 per cent to Rs 413.15 on the BSE. Bharati Shipyard’s shares closed 0.09 per cent higher at Rs 167.35, while ABG’s fell by 3.88 per cent to Rs 204.30.

According to analysts, Rs 400 is fair price for Great Offshore considering the demand in the sector.

“Bharati has an advantage here as it had bought around 15 per cent stake at Rs 315 while ABG might end up paying a higher price for the 32 per cent,” said Mr Kapil Yadav, research analyst, Dolat Capital.

With oil price hovering around $70 a barrel, the offshore oilfield service space is seen as a lucrative business for shipbuilders as part of their backward integration initiative, said Mr Yadav

But analysts also suggest that ABG and Bharati are struggling to get new orders for building ships. Once these orders get exhausted, they may face a huge crisis.

“Many of Great Offshore’s 40-odd vessels are due for replacement. If ABG or Bharati gets Great Offshore, replacing these ships could provide large capital,” said an analyst with a Mumbai- based brokerage house.

More Stories on : Mergers & Acquisitions | Shipping/Ports | Open Offers

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