Orissa Sponge hits 5% upper circuit on block deal

MUMBAI: Share prices of Orissa Sponge Iron and Steel hit the upper circuit of 5% at Rs 269, on reports of a large block deal.

According to brokers, the block deal constituted close to 9.95% of the company���s equity. About 20.5 lakh shares had changed hands on BSE at 12:20 p.m. which has a two week average quantity of less than 2,000 shares.

The stock has been trading firm and has appreciated almost 165% in the last one month. The stock was in news after Bhushan Power and Steel, along with Titanic Steel Industries and Olympian Steel Industries, jointly made an open offer to acquire up to 52 lakh shares, or 26% equity stake of Orissa Sponge Iron & Steel. The open offer would commence on April 3 and close on April 23, 2009 at a price of Rs 300.

Under the Indian takeover regulations, the acquirer is required to make an open offer for an additional 20% stake in the target firm, after its stake in the latter touches 15%. The open offer comes in the wake of Bhushan Power and Steel raising its stake in Orissa Sponge to about 15% from 5.35% earlier by acquiring shares additional shares from the open market.