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Sunday, March 4, 2012

Reliance Industries acquires Analjit Singh’s stake in East India Hotels

Mukesh Ambani-led Reliance Industries has acquired Max Group chairman Analjit Singh’s 3.73% stake in PRS Oberoi promoted East India Hotels (EIH) Ltd that owns and operates hotels under The Oberoi and Trident brands.

Singh’s investment firms Gaylord Impex and Pivet Finances sold all the 21,315,000 EIH shares in a bulk deal to RIL subsidiary Reliance Industries Investment and Holding Pvt Ltd at Rs90 a piece valuing the deal to Rs191.83 crore. RIL’s current holding has thus increased to 18.53% from 14.8% earlier.

The increase in RIL's shareholding in EIH however does not trigger an open offer because, in August last year, the Securities and Exchange Board of India (SEBI), raised the initial trigger threshold for an open offer, from the 15% to 25%. The market regulator also increase the open offer size from 20% to 26%.

As a result acquirers will now need to make mandatory open offer for further 26% stake from the public shareholders after buying 25% under a private sale. The minimum stake that an acquirer can now obtain in a target company after the open offer if fully subscribed would be a controlling 51%.

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