Prabhat Dairy shares plunged as much as 17.5 percent to hit 33-month low in morning on Monday after Tata Sons board rejected the proposal to buy the company.
After the initial sharp cut, the stock managed to recover from day's low of Rs 77, the lowest level since February 2016. It was quoting at Rs 89.60, down 3.97 percent on the BSE, at 10:42 hours IST.
"Tata Sons has rejected a proposal by the group's mergers & acquisitions team for Tata Global Beverages to purchase Prabhat Dairy for about Rs 400 crore," The Economic Times said quoting two people with knowledge of the development.
The report further said the board did not see it significant enough to scale up the business in the challenging dairy sector, and instead asked Tata Global Beverages to focus on its core business. The board, headed by N Chandrasekaran, had discussed both proposals including the acquisition of cash-starved Jet Airways on November 16, the report added.
Prabhat Dairy had reported a 36 percent year-on-year increase in profit to Rs 12.35 crore for the quarter ended September 2018 and 9.08 percent rise in revenue to Rs 418.42 crore compared to year-ago period.
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