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February 17, 2003 16:43 IST
ACC zoomed on Monday on rumours that Sebi may ask Gujarat Ambuja Cements to come out with an open offer for the company's shareholders.
By 14:30 IST, the scrip of the cement firm was the biggest gainer among 30-share BSE Sensex stocks, jumping 6.51% higher to Rs 157. A relatively higher volume of over 840,000 shares was recorded on the counter.
Dealers said the rally on the ACC counter was due to market buzz that the market regulator, Securities and Exchange Board of India may give its ruling on the Gujarat Ambuja case next week. Investors were accumulating the ACC stock on hopes that GACL may be asked to make an open offer for ACC shareholders, they added.
Earlier, the Securities Appellate Tribunal ordered Sebi to take a re-look at the deal involving GACL acquiring a 14.45% stake in ACC. In a statement on 25 October 2002, SAT said that Sebi had jumped to conclusions while stating that the acquisition of stake by GACL in ACC was not tantamount to a change in management control, and, therefore, did not trigger the Takeover code.
Earlier, Sebi had stated that the Tata group, despite having a 14.45% stake in ACC, did not exercise any control over the company. Therefore, the Tata group's sale of stake to GACL did not result in change in management control. However, a group of ACC shareholders moved SAT against the Sebi ruling.
SAT asked Sebi to conduct a fresh probe into the deal, saying the market regulator's earlier findings were not complete and adequate. SAT told Sebi to look into whether GACL is in a position to effect control over ACC (to look afresh as to whether the acquisition of 14.45% stake by GACL resulted in change in management control or not). If Sebi concludes that GACL has, in fact, acquired management control over ACC, GACL will have to make an open offer at Rs 370 per equity share plus interest for the last three years.
In 1999-2000, GACL had bought the Tata group's entire holding of 14.45% in ACC in three tranches at Rs 370 per share.
The rise in the ACC scrip was also attributed to reports that the company has offloaded its entire 19.5% stake in the tyre joint venture – Bridgestone ACC India – to Bridgestone Corporation for Rs 50 crore. The move is a part of the company's strategy to exit non-core businesses.
Meanwhile, in January 2003, ACC registered a 11.68% rise in cement dispatches to 1.19 million tonnes, from 1.07 million tonnes in the same month a year earlier. Production rose by 9.07% to 1.15 million tonnes, from 1.05 million tonnes a year ago. Cumulative production and dispatches figures for the period April to January 2003 were at 11.37 million tonnes and 11.36 million tonnes respectively.
Last month, ACC announced its third quarter results (ended 31 December 2002). The company posted a 19.4% rise in net profit to Rs 20.21 crore, compared to Rs 16.93 crore in the corresponding period of the previous year. However, net sales declined by 3.06% to Rs 682.28 crore (Rs 6.82 billion) from Rs 703.86 crore (Rs 7.03 billion) in DQ 2001.
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