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JSW Steel has raised the open offer price to acquire 20 per cent stake in the Ispat Industries to Rs 22.25 per share from Rs 20.54.
The open offer was triggered after JSW Steel in December 2010 acquired 41.29 per cent stake in loss-making Ispat for Rs 2,157 crore.
The enhanced offer price will cost JSW an additional Rs 111 crore, taking the total outlay for acquiring 20 per cent stake to Rs 1,440 crore. The offer closes on April 5.
The acquirer hereby voluntarily increases the offer price from Rs 20.54 a equity share to Rs 22.25 a equity share (‘revised offer price'), said Enam Securities, the manager of JSW Steel offer, in a filing to the BSE.
“The revision in open offer price could be due to the poor response it had received for the issue which opened on March 17.
The revised price is still marginally lower to the Thursday's closing price of Rs 22.40,” said an analyst.
Set To breach mark
JSW Steel holding will breach the 50 per cent mark only if it receives an encouraging response to its open offer, he added.
The acquisition of Ispat will provide JSW Steel a manufacturing facility of 3.3 million tonnes at Raigad in Maharashtra.
It will enable the company to tap the most vibrant western India market more effectively, said a dealer. Besides HR coil, Ispat assets include 1.6 million tonnes of DRI and two million tonnes blast furnace.
JSW has outlined a capex spend of Rs 3,100 crore over the next couple of years to set up a 110-MW captive power plant, implement the three mtpa pellet plant, expand steel production capacity from 3.3 to 4 mtpa and an one mtpa coke plant.
As part of Ispat turnaround plan, JSW intends to supply pellets from its Vijaynagar plant which will have a surplus capacity of two mtpa from May 2011, source coking coal and coke at competitive rates and supply power from JSW Energy at Rs 4 a unit against Rs 5.95 a unit currently paid by Ispat.
Shares of JSW Steel were marginally down by 0.43 per cent at Rs 898 on Thursday.
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