New Delhi, Nov 18 (PTI) Shares of Escorts Ltd on Thursday jumped nearly 11 per cent after the farm machinery major and Kubota Corporation announced a deal under which the Japanese partner will acquire an additional 5.9 per cent stake in the Indian firm for Rs 1,872.74 crore.
The stock zoomed 10.60 per cent to at Rs 1,802.90 on BSE. During the day, it gained 11.95 per cent to its 52-week high of Rs 1,825.
On NSE, it jumped 10.11 per cent to Rs 1,796.
In volume terms, 6.14 lakh shares were traded on BSE and over 1.90 crore on NSE.
Farm machinery major Escorts Ltd and Kubota Corporation on Thursday announced a deal under which the Japanese partner will acquire an additional 5.9 per cent stake in the Indian firm for Rs 1,872.74 crore, paving the way for the latter to become a majority stake holder for which it could invest around Rs 10,000 crore.
In a multi-structured deal, Kubota will increase its stake in Escorts to 14.99 per cent after a preferential issue of 93.64 lakh equity shares at an issue price of Rs 2,000 per share, aggregating to Rs 1,872.74 crore. It will become a joint promoter in Escorts.
Kubota, which currently has 9.09 per cent stake in Escorts, will then make an open offer to the public shareholders to acquire up to 26 per cent of the share capital in accordance with SEBI regulations at the same price as the preferential issue, Escorts said in a statement.
In the event of the open offer being fully subscribed, Kubota’s investment for the purpose could be over Rs 8,250 crore and its stake in Escorts would increase to 44.80 per cent after the first capital reduction.
Escorts said its board has also approved changing the name of the company from ‘Escorts Ltd’ to ‘Escorts Kubota Ltd’ or any other name containing the trade names ‘Escorts’ and ‘Kubota’ as may be approved by the Central Registration Centre, Registrar of Companies (RoC) and other regulatory authorities. PTI SUM RUJ RUJ
