The battle to acquire Great Offshore Limited (“GOL”) saw aggressive bidding by two companies, Bharti Shipyard Limited (“BSL”) and ABG shipyard limited. Of these two companies ABG limited withdrew from the bidding race a day before it had to make an open offer by selling its stake to Edelweiss capital and others. After ABG withdrew from the battle Bharti Shipyard Limited paid approximately Rs 900 crores to complete the acquisition of stake in Great Offshore Limited. Great Offshore Limited’s share price rose from Rs 344/- per share to Rs 590/- per share as a result of the bidding war between the two companies, ABG Limited and Bharti Shipyard Limited. This increased BSL’s investment costs by around Rs 450 crores. In the following sections we attempt to evaluate the takeover battle from its inception to the commencement of the open offers by both the acquirers and in the process analyze the legal and regulatory implications of the transaction. Parties involved in the transaction
1) Great Offshore Limited
GOl was hived off from Great Eastern Shipping Company (GESC) and incorporated as a separate company on July14th, 2005 under the stewardship of Mr. Vijay Kantilal Sheth. Great Offshore is India's prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers to carry out offshore exploration and production (E&P) activities. From drilling services to marine and air logistics, from marine construction to port/terminal services and beyond, Great Offshore meets a wide gamut of the offshore requirements of an E&P operator. GOl is listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). 2) Bharti Shipyard Limited
BSL was established in 1973 as a small shipbuilding facility at Ratnagiri and incorporated as a company on June 22, 1976. Bharati Shipyard Ltd is the foremost privately operated shipyard in terms of building facilities in India. BSL has earned its reputation by constructing a large array of specialized sophisticated vessels for diverse offshore, coastal and the marine market sectors. The synergy of operating from six locations enables BSL to have a tremendous amount of flexibility and construct a large number of vessels in a limited time period. The company is promoted by Mr.P.C Kapoor and Mr Vijay Kumar. It is listed on both the NSE and the BSE. 3) ABG Shipyard Limited
ABG Shipyard Ltd., the flagship company of ABG group was incorporated in the year 1985 as Magdalla Shipyard Pvt. Ltd. with the main objects of carrying Shipbuilding and Ship Repair business. In a span of 15 years from the year 1991, the company has achieved the status of the largest private sector shipbuilding yard in India with satisfied customer base all around the world. ABG is an established manufacturer and service provider of a variety of ships, including bulk carriers, interceptor boats, diving support vehicles, anchor handling tugs & other multipurpose vehicles. The Shipyard has executed many prestigious Shipbuilding and Ship-repair contracts against stiff International Competition for both Export and Domestic Markets. All these vessels have performed very well, thus establishing its reputation for building and delivering vessels of the best quality at competitive prices and delivery periods. It is promoted Mr. Rishi Agarwal and is listed on both the exchanges. Background
The offshore division of GE shipping was hived off into GOl under the stewardship of Mr. Sheth in 2005. As a result he held 3% in both the companies respectively. He wanted to tighten his grip on GOL and offered to buy out the stakes of his family members in GOL. He wanted to hold 15% in GOL in his personal capacity. He sold his 3% stake in GE shipping to his relatives and used the money to buy their stake in GOL. The price he paid for each share of GOL was Rs 850/- per share which was much more than the then market price of...