TBZ shares zoom 20%, hit upper circuit after GRT Jewellers open offer

Tribhovandas Bhimji Zaveri (TBZ) shares surged 20% to hit their upper-circuit limit during Tuesday’s trading session on the National Stock Exchange (NSE) after GRT Jewellers (India) announced an open offer as part of a deal to acquire control of the listed jewellery retailer.

The stock jumped Rs 61.10, or 19.99%, to Rs 366.80 on the NSE, compared with its previous close of Rs 305.70. It opened at Rs 315 and touched a low of Rs 313.10 before rallying to the upper circuit level.

The counter had outstanding buy orders for more than 10.66 lakh shares, while its volume-weighted average price stood at Rs 349.96. The stock also touched a fresh 52-week high.


Under the agreement, GRT will purchase 4.95 crore shares, representing 74.12% of TBZ's voting capital, at a maximum price of Rs 209 per share.

The promoter-stake transaction is valued at up to Rs 1,033.71 crore. The sellers include members of the Zaveri family and two promoter-group companies.

The acquisition triggered a mandatory open offer for up to 1.73 crore shares, representing the remaining 25.88% of TBZ's voting capital, at Rs 249.61 per share. If fully accepted, the cash offer could cost GRT as much as Rs 431.10 crore, bringing the maximum combined transaction value to about Rs 1,465 crore.

Although takeover regulations require an open offer for at least 26% of a target company's voting capital, GRT's offer covers 25.88% because that represents TBZ's entire public shareholding as of the announcement date.

The open-offer price is about 18% below TBZ's previous closing price of Rs 305.70 and nearly 32% lower than Tuesday's upper-circuit price. The sharp stock rally, therefore, came even though the tender price was below the prevailing market value.

Following completion of the promoter acquisition, GRT will assume control of TBZ and become its new promoter. The existing promoters will cease to be shareholders and will be declassified from the promoter and promoter-group category.

The transaction is subject to approval from the Competition Commission of India and identified lenders, along with other conditions under the share purchase agreement. The price paid for the promoter stake may be adjusted downwards but cannot be increased.

GRT has said it does not intend to delist TBZ. If the acquisition and open offer reduce public shareholding below the mandatory 25% threshold, the acquirer will take steps to restore compliance within the period permitted under listing regulations.

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Founded in 1864, TBZ operates 37 stores across India. GRT has 68 outlets in India and one in Singapore, and the acquisition would expand the combined retail network to 106 stores.

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