International Paper offers Rs 544 a share for AP Paper

Our Bureau Hyderabad | Updated on November 12, 2017

Substantial premium to current price of Rs 312

Lazard India Pvt Ltd, on behalf of IP Holding Asia Singapore Pte Ltd, along with International Paper Company, together persons acting in consort (PAC) has come up with an open offer to acquire additional 21.5 per cent stake in Andhra Pradesh Paper Mills Ltd (APPM).

The company has set the offer price at Rs 544.20 a share, at a steep premium. The company shareholders seem to have given a thumbs up to the offer with the APPM scrip hitting upper circuit of 9.99 per cent closing the day's trade at Rs 311.65 on the BSE. This is against two weeks scrip trade average price of Rs 189.46.

In the past three days, APPM shares have made swift strides hitting the upper circuit on all the three days after International Paper Company, the Memphis (US)-based diversified paper maker, announced its plans to acquire 53.5 per cent of the APPM stake from The Bangurs (promoters) through its Asia subsidiary based in Singapore.

The acquirers are making an offer to pick up 85,67,521 fully paid up equity shares of Rs 10 each, representing 21.5 per cent of the merging voting capital of APPM as per SEBI guidelines.

The issue to be managed by Lazard India and Karvy as registrar, will open on May 26 and close on June 14, according to filings to the stock exchanges and a public notice.

An analyst with a leading broking company said that the price offered factors the effort made by the company promoters over the years to make the paper company what it is today. It also factors the potential of business going forward. While most of the developed countries are witness to a growth of about 1 to 2 per cent in the paper business, India has potential for great upside and is growing at about 8 per cent, he said.

Published on April 01, 2011

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