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GIC will not sell shares to either bidder in the VST war

The state-owned General Insurance Corp will not subscribe to either of the two open offers made for cigarette maker VST Industries, a senior official at the insurance giant said on Wednesday.

"We will not be subscribing to either of the offers but will watch for further developments," the official said.

The move is a blow to both Bright Star Investments, owned by a Bombay broker and Russell Credit, owned by ITC Ltd and backed by British American Tobacco Plc.

Bright Star had bid for a 30 per cent stake in VST at Rs 151, while Russell Credit had offered Rs 125 for 20 per cent. The offers close on Wednesday.

Reinsurer GIC and its four subsidiaries hold a stake of about 10 per cent in VST Industries.

VST shares were up 6.31 per cent at Rs 155 in late morning trade, outperforming the Bombay benchmark index which was up 0.12 per cent.

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