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Dalmia group raises Gesco offer price to Rs 45

The A H Dalmia group said on Wednesday that it had raised the offer price to Rs 45 per share from Rs 27 per share in its open offer for taking 45 per cent stake in Bombay-based realty company Gesco Corporation.

"We bought 22,000 shares of Gesco on December 26 at an average cost of Rs 43 per share. The highest price paid was Rs 45 per share. This was done through the open market purchase route; we did not conduct any negotiated deals," Renaissance Estate director Abhishek Dalmia told PTI .

Dalmias have mounted a Rs 700 million bid for taking 45 per cent of all outstanding shares of Gesco, promoted by the Sheths. The increase in offer price follows the Sheth-Mahindra counter offer of Rs 44 per share for 33.5 per cent of all outstanding shares of Gesco.

Earlier this month, Dalmias extended the closing date for the open offer to January 24 from January 15 earlier after SEBI allowed Mahindras a similar extension for their counter offer, ostensibly due to the long postal strike.

While the ball has now been firmly placed in the Sheths' court, the difference in the two offer prices is a mere one rupee and it is now for the shareholders to decide which of the offers prices is more lucrative for them.

At present, while the Dalmias claim to hold 10.4 per cent stake in Gesco, Sheths reportedly hold another 30 per cent stake in the realty company.

While financial institutions collectively hold 12 per cent in Gesco, foreign institutional investors (FIIs) hold another eight per cent stake.

To counter the takeover threat, Sheths late last month roped in Mahindra Realty and Infrastructure Developers Ltd, which acquired 6.34 per cent stake in Gesco from International Finance Corporation.

The A H Dalmia group mounted a Rs 350 million bid to take over Gesco Corporation and subsequently hiked the 'war chest' to Rs 700 million.

Meanwhile, Gesco promoters - Bombay-based Sheths - have given a counter offer to the A H Dalmia open offer, and both the groups are awaiting shareholder response before their respective offers reach the last date.

According to sources, Gesco Corporation was originally a real estate division of Great Eastern Shipping Corporation Ltd, and was spun off into an independent company in April 1999.

They said Gesco has a share capital of around Rs 290 million with accumulated reserves in excess of Rs 1 billion. It has made significant investments in real estate in Bombay, Delhi, Pune and Bangalore.

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