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Key shareholders reject Modi Rubber offer

Key institutional shareholders of Modi Rubber reject the increased open offer price issued on Friday by the tyremaker's founders, as acceptance would leave tiny holdings of little value, a senior official of one institution said.

"The hike does not address the core issue," the official told ,Reuters. "We want the founders to buy our entire stake and we want to exit."

The institutional shareholders, led by the Industrial Development Bank of India, want to offload their cumulative 44 per cent stake in the loss-making tyre maker.

If the institutions accepted the offer, they would be left with just a nine per cent stake of "little market value" and would no longer have any say in the company, the source added.

The founders now own 24 per cent, and in March issued an open offer seeking to acquire a further 35 per cent.

The Modi family of Delhi initially offered Rs 80 per share, two months later raised the figure to Rs 81.50 -- and on Friday to Rs 90 a share.

Modi Rubber's shares on Friday traded as high as Rs 80.50, before closing at Rs 76.35, up 1.3 per cent from the previous day's final quote.

The benchmark 30-stock Bombay index closed 0.70 per cent lower.

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