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June 4, 2001
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Money > Business Headlines > Report June 4, 2001 |
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Bright Star beats Russell's VST bid; FIs hold the keyCorporate Bureau The battle for VST Industries entered a decisive phase today with broker RG Damani-controlled Bright Star Investments hiking its open offer price to Rs 151 per share, beating ITC subsidiary Russell Credit's bid by Rs 26. Last week, Russell Credit had raised its bid price for VST to Rs 125 per share from Rs 120. Saturday was the last day for the counter-offers. Russell Credit, however, refused to increase the offer price further, saying that the institutions should support its bid which had the support of the VST management. The VST Industries management had appealed to its shareholders to subscribe to Russell's counter offer, on the grounds that the ITC investment arm would enhance shareholder wealth by being a "strategic investor." Bright Star's latest offer price is at a 20 per cent premium over the VST closing price on Friday. The stock ended up 0.84 per cent at Rs 125.75, even as the Sensex closed down 2.04 per cent. Now the decision of the financial institutions, who hold over 17 per cent stake in VST, will be the key to settling the issue. It is not yet known whether the FIs will subscribe to Russell Credit's offer in view of the VST management's appeal, or go entirely by pricing. John Band, managing director of ASK Raymond James, manager to Bright Star's offer, said that the latest offer would be the final bid as the two parties had to make a final bid seven working days before the offer closed on June 13. Bright Star also increased the offer size to 30 per cent equity shares of VST, from the 20 per cent earlier. Officials at Kotak Mahindra Capital Company, the managers to Russell's offer, declined to comment. Bright Star has already acquired 16 per cent from the market. Band said: "We are satisfied with the existing management of VST Industries, and would not seek management control so long as it pursues shareholder friendly policies within areas of its core competence." As on March 31, LIC held 6.3 per cent, UTI 2.31 per cent, and GIC and its four subsidiaries 9.14 per cent of the equity capital in VST Industries. In addition, the Andhra Pradesh state government holds 4.69 per cent. The public holds 29.6 per cent. Powered by YOU MAY ALSO WANT TO READ:
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