Rayban proved firm in a weak market on Monday as market players anticipate a SAT ruling on the open offer to come in favour of shareholders.

The scrip of the eyewear company jumped up 4.45% to Rs 52.85. A total of 36,752 Rayban shares were exchanged on BSE by 15:10 IST.

The scrip has seen a bout of volatility over the last few sessions, as opinion vacillated over how the turn out of the SAT decision would be. In the 11 sessions between 20 February and 7 March 2003, Rayban lost 15.7% to Rs 50.60 from Rs 60. In the four prior sessions, the scrip rose 12.25% from Rs 53.45 on 14 February 2003.

The rise in the scrip today manifests as a result of buying by operators on reports that Rayban's plea will be heard by the Securities Appellate Tribunal on Monday. Players are confident that the SAT ruling will be in favour of shareholders, and this is setting off accumulation.

Luxottica had contested Sebi's order for on open offer over Rayban after Sebi had asked the Italian company to make an open offer for 20% additional stake in the Indian eyewear company and also pay up interest on the consideration.

Milan, Italy-based eyewear giant Luxottica Group SpA is a global leader in premium eyeglass frames and owns several well-known brands such as Giorgio Armani, Ferragamo and Vogue.

Sebi directed Luxottica to acquire another 20% stake in Rayban as it deemed that the Italian company had violated the takeover code in acquiring stake in Rayban. The takeover code makes it imperative for a company acquiring more than 15% in another company to make an open offer for a further 20% stake from the target company's public shareholders.

Luxottica had gained control over a 44% stake in Rayban Sun Optics through a 1999 takeover of Bausch & Lomb of the United States, but did not follow up with the open offer.

Analysts are of the opinion that if the open offer materialises, the price would be about Rs 100 (a premium of 89.2% to the current market price), if 28 April 1999 is considered the reference date.

Besides, Sebi has also ruled that Luxottica make a payment at 15% per annum to the shareholders for the loss of interest caused to them. The interest shall be calculated from 27 August 1999 till the date of the actual payment of consideration.

For the second quarter ended 30 September 2002, Rayban reported a loss of Rs 0.21 crore compared to a net profit of Rs 0.16 crore in the corresponding period of the previous year. Net sales increased by 55.09% to Rs 5.18 crore from Rs 3.34 crore in SQ 2001.

As on 31 December 2002, the public and institutions held 41.94% and 2.97% stake in Rayban, respectively.