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A PACKAGE not yet attractive enough.

DHL's offer to residual shareholders of Blue Dart so as to delist, by offering up to Rs 550 per share may fall short of investor expectations. Though the Blue Dart stock did rise sharply in the run-up to the announcement, it cooled off a bit thereafter, but still rules at a 5 per cent premium to the offer price. Institutional participation, which is key to the success of such offers, appears unlikely at the price offered. At the current price, the stock trades at about 17 times its expected per-share earnings for CY-07. Given the promise the express cargo industry holds, this earnings multiple does not appear unreasonable. With a strong air infrastructure and a solid ground network, Blue Dart could be a key beneficiary of demand trends.

Nath Balakrishnan

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Delisting overtures

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