Cairn stock soars on talk of takeover

MUMBAI: US-based hedge fund Indus Capital and the Singapore government have bought three million shares each in Cairn India (CIL), the Indian subsidiary of the UK-based oil exploration company, Cairn Energy.

The shares represent close to 1% equity of the company. The change in shareholding took place even as Cairn India’s shares touched an all-time high on the BSE on Monday on rumours that it has a takeover offer from Petronas of Malaysia. International media last week reported that Cairn Energy is a buyout target for Swiss oil refiner Petroplus.

A senior management source told ET: “We are not in talks with anyone, Petronas or Petroplus. These are all market rumours. Our strategy is not to sell as we see value in our business.”

However, on takeover speculation, shares of Cairn India traded at all time high of Rs 156.20 before closing at Rs 152.20, up 5.47% or Rs 7.90. Similarly in London, shares of its parent company Cairn Energy on Monday traded at 1,832 pence, up 2.75% over the previous day’s close on rumours of a buyout by Swiss-based oil refiner Petroplus.

When contacted, Rahul Dhir, CEO, CIL, told ET: “We never discuss or comment on market rumours.” Malaysian oil-major Petronas had acquired a 10% stake in Cairn India through its wholly-owned subsidiary PICL.

While acquiring 10% equity in Cairn India in November 2006, Petronas had said it views its shareholding in Cairn India as a long-term supportive investment and hopes to build a positive and constructive relationship with the management of Cairn India. Petronas has no intention of increasing its stake in Cairn India. Both Petronas and Petroplus officials could not be reached for comment.