Financial Daily from THE HINDU group of publications
Sunday, Aug 31, 2003
Financial Daily from THE HINDU group of publications Sunday, Aug 31, 2003 |
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Investment World
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Open Offers Markets - Open Offers San Geo: Accept Sowmya Sundar
The book value is the only measure to value the company in the absence of any income or profits for the last three years. The offer price is equivalent to the book value of the company and, hence, is a fair price. Moreover, there is no market price data as the stock has not been traded in the stock exchanges for the last six months. The company is moving into a new line of business under the new acquirer and the future prospects of the company are not very clear now. The offer price is also much higher than the price that the acquirer has paid to the promoters under the share purchase agreement. Since the stock has not given any returns in the past in the form of dividends or capital appreciation, the open offer is a good exit opportunity for shareholders. Background: The acquirer, who has experience in the field of construction and media, had entered into a share purchase agreement with the promoters to acquire 25.32 per cent of the company at Rs 1.80 per share. Subsequently, the acquirer has made an open offer to acquire 20 per cent of the subscribed equity share capital of San Geo Services at Rs 8.60 per share under SEBI regulations. San Geo used to provide Seismic support services for ONGC. The company's business was entirely dependent on ONGC. Since there were no orders from ONGC in the last couple of years, the company has not earned any income. Therefore, it decided to discontinue its operations and diversify into media-related activities. The company has decided to change its name to Sanguine Media Ltd. The company's future is unclear now as the acquirer intends to pursue a new line of business in the media sector. Offer details: The offer opens on August 25, 2003 and closes on September 23, 2003. Ashika capital is the manager to the offer. The stock is listed on the Madras, Mumbai and Hyderabad stock exchanges.
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