West Coast Paper plunges 11% on stake sale reports

MUMBAI: Shares of West Coast Paper fell sharply in early trade on huge volumes following reports that the US-based International Paper is in talks to buy stake in the company. The Economic Times reported the deal is likely to be valued between Rs 800 crore and Rs 1,200 crore.

The counter has been abuzz recently and gained over 30 per cent in September to hit fresh weekly and monthly-high of Rs 75.60 in trade today.

Traded volume is above 10-day moving average and over 36 lakh shares have exchanged hands on the NSE. According to dealers, institutional investors seem to be offloading the stock on stake sale concerns.

According to the Economic Times report, an initial round of negotiations between the Memphis-based International Paper and West Coast Paper was held recently where valuations and future expansion plans for the plant located in Dandelli, Karnataka, were discussed.

In an emailed response to queries from ET, International Paper said: “As a policy, International Paper doesn’t comment on rumours or market speculation.”

Although West Coast did not reply to queries from ET, a company official said there were no immediate plans by West Coast Paper to divest stake.

At 09:55 am, the stock was at Rs 63.20, down 10.73 per cent, on the NSE. It touched a high of Rs 76.45 and a low of Rs 61.15 in trade today.