Parent to buy back 23pc in ABB; shares soar 23pc on BSE

MUMBAI: The Swiss parent ABB Group today made a Rs 4,400-crore (about USD 965 million) open offer to acquire an additional 23 per cent stake in its Indian subsidiary ABB, to strengthen its presence in the country.

The ABB Group, which currently holds over 51 per cent stake in ABB, would have a total stake of 75 per cent after completion of the open offer. The open is offer is a 34 per cent premium on Friday's closing price of ABB on the BSE.

"The potential value of the transaction at the offer price (Rs 900) is approximately Rs 4,400 crore (USD 965 million)," ABB Group said in a statement.

Reacting to the proposal by the parent company, the ABB counter soared nearly 30 per cent to Rs 869 on the BSE and settled the day with a gain on 23.44 per cent Rs 831.45 on a day when the index shed nearly 160 points.

A top ABB Group official in a conference call said the Swiss parent is very optimistic about the Indian economy and also sees the potential for long-term development of its activities here.

The open offer starts on July 8 and ends on July 27. The ABB Group is looking to buy 48,510,997 shares, representing 22.89 per cent stake in the domestic entity, according to a filing by ABB to the Bombay Stock Exchange.

The Swiss parent would acquire the shares at a price of Rs 900 apiece, resulting in a deal value of Rs 4,400 crore.

Regarding the offer, the ABB Group said the offer represents a premium of approximately 34 per cent on ABB's Friday's closing price of Rs 673.55.

The open offer would be managed by HSBC Securities and Capital Markets India.