The Hindu Business Line : Reliance declines offer to buy 5% additional stake in IPCL

RELIANCE Industries Ltd is understood to have turned down an offer from the Government to buy an additional five per cent stake in Indian Petrochemicals Corporation Ltd (IPCL) for increasing its stake in the company from 46 per cent to 51 per cent.

The company is of the view that a wider equity distribution would help in maintaining greater liquidity. Besides, greater public participation would also be in line with the Government's policy of disinvesting to public, sources associated with the process said.

The Government had earmarked five per cent of the residual equity to Reliance (at Rs 195 per share or the offer price determined through a book-building process, which ever was higher) out of the 29 per cent stake it is selling in the market, the public offer for which was launched on February 20.

It had asked Reliance to make up its mind on picking up the additional five per cent stake in IPCL by Saturday. The five per cent equity would now be sold in the market as part of the public offer, the sources said.

Reliance had acquired 26 per cent controlling stake in IPCL in 2002 and subsequently acquired an additional 20 per cent under the Take Over Code of the Securities and Exchange Board of India. According to bankers, the investors had placed bids for 6.5 crore shares predominantly at the floor price of Rs 170 per share fixed by the Government. The offer price would be finalised after the book closes on February 27.

More Stories on : Mergers & Acquisitions | Petrochemicals

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