Escorts touched a 52-week high of Rs 1,825, rising 12 percent intraday on November 18 as the company board approved further stake acquisition by Kubota Corporation.
The company board in its meeting held on November 18 approved the raising of equity capital aggregating to Rs 1,872 crore through preferential issue of 93,63,726 equity shares of face value Rs 10 at Rs 2,000 per share (including a premium of Rs 1,990 for each equity share), to Kubota Corporation, Japan, the company said in a press release.
With this Kubota Corporation will raise its equity stake in tractor maker Escorts to 14.99 percent through a preferential issue.
Kubota will subscribe to new equity share proposed to be issued by Escorts and shall become a joint promoter along with the Nanda family, the existing promoters of the company.
The current promoter group (Nanda family) are not selling any shares of the company, Escorts said.
The proposed acquisition of control over the company by the investor to become a joint promoter of the Company has triggered an obligation on the investor to make an open offer to the public shareholders of the listed subsidiary of the company i.e. Escorts Finance Limited.
The open offer will be made at the same price as the preferential issuance, Rs 2,000 per share and Kubota’s stake in Escorts will increase to 44.80 percent after the open offer.
Kubota Corporation is currently holding 9.09 percent stake in Escorts, as per the BSE shareholding pattern for the quarter ended September 2021.
The board accorded its approval to change the name of the company from “Escorts Limited” to “Escorts Kubota Limited” or any other name containing the trade names “Escorts” and “Kubota” as may be approved by the Central Registration Centre (“CRC”), RoC and other regulatory authorities.
JM Financial acted as the financial advisor to Escorts Limited.
Escorts share ended at Rs 1,802.90, up Rs 172.75, or 10.60 percent on the BSE.
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