Great Offshore...ABG enters race; Bharati ups ante

Dhanshree Properties Pvt. Ltd., on behalf of Bharati Shipyard Ltd., on June 23, acquired 16,99,611 equity shares of Rs 10 each of Great Offshore Ltd., constituting 4.58% of the current paid-up share capital of the target company, at a price of Rs 403.00 per equity share through a block deal. The transaction was done with some members of the Sheth family, the original promoters of Great Offshore. The deal took place shortly after ABG Shipyard Ltd. threw its hat in the ring for the acquisition of a substantial stake in Great Offshore. ABG Shipyard offered a price of Rs375 per share to acquire close to 32% stake in Great Offshore.

Bharati Shipyard will surpass the counter bid by ABG Shipyard for a controlling stake in Great Offshore, Managing Director P.C. Kapoor told reporters in Mumbai, raising prospects of a protracted bidding war. "We will be making another revised offer, the timing will be a few days hence, and what the price will be I cannot say right now," he said. Bharati Shipyard has invested Rs2.45bn till now to acquire about 19.5% in Great Offshore, Kapoor said. ABG Shipyard currently holds 2% in Great Offshore. Kapoor hinted that the bid could rise above Rs403 and total investment in Great Offshore could top Rs4bn.

It may be recalled that on June 4, Dhanshree Properties, Natural Power Ventures Pvt. Ltd. along with Bharati Shipyard had announced a public offer to acquire on a voluntary basis up to 78,26,788 fully paid-up equity shares of Rs10 each of Great Offshore, constituting 20% of the emerging voting capital of the target company at a price of Rs344 per share.

Meanwhile, ABG Shipyard's Managing Director Rishi Agarwal said that the company will not come back with any immediate reactions," after Bharati announces a revised price. "We will evaluate at the right time," he told reporters in Mumbai when asked if it would make a counter offer again. "Next step is we'll sit and decide what's the best way forward." ABG Shipyard plans to fund the acquisition from its cash reserves of Rs2.5-3bn, Agarwal said. Bharati Shipyard has substantial support from some major shareholders of Great Offshore, including the Sheth family, Kapoor said. The company is also in talks with some key financial partners and cannot rule out tying up with a strategic partner for this deal, he added.