THE Burman family is likely to sell its 14.5% stake in Punjab Tractors
to the buyer of Actisâ€™ stake in the company, giving the acquirer a
controlling 43% stake.
While it is not clear whether the Burmansâ€”the promoters of Dabur Indiaâ€”will jointly sell their shareholding in tandem with Actis or enter into a separate deal with the buyer, an industry source said the Burmans have decided to exit the tractor company.
Actis has put its 29% stake in Punjab Tractors on the block, and Tata Motors, Mahindra & Mahindra, John Deere and Tafe are learnt to have evinced interest, triggering expectations of a bidding war. At the current market capitalisation, Actisâ€™ holding is valued at around Rs 500 crore.
The Burmansâ€™ move to exit Punjab Tractors will be welcomed by the bidders as they would not like a long-term strategic investor with 14%-plus shareholding to remain in the company. At present, non-executive chairman PD Narang is a Burman nominee.
The Punjab Tractors scrip closed at Rs 283.50 on BSE on Tuesday and m-cap of the company is around Rs 1,700 crore. At the current m-cap, the Burman shareholding will be valued at around Rs 250 crore. But with several bidders in the race and a control premium expected, the final price could be much more. The average cost of acquisition of the Burmans was around Rs 225-230 per share and they have spent around Rs 200 crore in buying the Punjab Tractor shares.
The Burmans had adopted a wait-and-watch policy a couple of months ago when news of Actisâ€™ proposed selloff became public.
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