M&M makes open offer of Rs. 490 crores to public shareholders to acquire Punjab Tractors

Mahindra & Mahindra Limited made a Rs. 490 crores ($110 mn) open offer for a further 20% in Punjab Tractors Limited and its subsidiaries, as required by law after it won the bidding for a 43.3% stake last week.

Mahindra, India’s top tractor and utility vehicle maker, and subsidiary Mahindra Holdings & Finance Limited are buying stakes held by private equity firm Actis and the Burman family in a deal that values Punjab at nearly Rs. 2200 crores.

In a newspaper advertisement, Mahindra made an offer to buy up to 12.15 mn shares from shareholders of Punjab Tractors, which makes tractors and farm equipment at Rs. 360 a share, the same price that it agreed to pay for the 43.3% stake. Separately, Mahindra made an offer to buy almost 480,000 shares, or 20%, in Swaraj Automotives Limited, in which Punjab Tractors owns 24.2%, at Rs. 244 per share. Mahindra also made an open offer to buy 20%, or 2.48 mn shares in Swaraj Engines Limited, in which Punjab Tractors owns 33.2%, at Rs. 151 a share.

The financing of the three offers would be through internal accruals and/or corporate borrowings. The offers open on May 3 and close on May 22.

Read the article in The Economic Times.
Related Post:
M&M wins Punjab Tractors bid; to pay Rs. 951 crores for 43.5% stake

M&M wins Punjab Tractors bid; to pay Rs. 951 crores for 43.5% stake

Mahindra & Mahindra (M&M), the country’s largest tractor company, has turned out to be the winner in the Punjab Tractors stake sale. M&M will shell out Rs. 360 per share for a 43.5% stake, valuing Punjab Tractors at around Rs. 2200 crores. M&M will end up paying a total consideration of a little over Rs. 951 crores in an all-cash deal to buy out private equity firm Actis and the Burman family of Dabur from Punjab Tractors. Actis will gross Rs. 634 crores from the sale of its 29% in Punjab Tractors, while the Burman family will get around Rs. 317 crores for its 14.5% stake.

The final round of bidding boiled down to a contest between M&M and Ashok Leyland. Initially, Ashok Leyland was known to have offered Rs. 320 per share of PTL while M&M was said to have made offers in the range of Rs. 330-335 per share. M&M also offered a part-cash, part-stock option but finally clinched the deal when it upped its all-cash offer to Rs 360 per share. M&M will now have to make an open offer to buy an additional 20% in Punjab Tractors, as per SEBI regulations.

Read the article in The Economic Times.

Ashok Leyland, M&M lead Punjab Tractors bid race; TAFE, Tatas back out, Tata Group buys plant in South Africa

Ashok Leyland Limited and Mahindra & Mahindra Limited appear to be the frontrunners in the race to acquire a stake of around 43% in Punjab Tractors Limited. The 43% stake has been put on the block by owners, Delhi-based private equity fund Actis and the Burman family, promoter of Dabur. According to unconfirmed reports, Ashok Leyland has placed a higher bid in the range of Rs. 320-380 per share. The Ashok Leyland bid demands some guarantees from the management. Details of M&M’s bid were not known.

If it does eventually manage to acquire the share, Ashok Leyland will have to make a mandatory open offer of another 20% of Punjab Tractors and would eventually become a majority shareholder of the company. An announcement on the stake sale is expected shortly. However, it is still not clear whether Leyland has also managed to acquire the 14% stake Punjab Tractors holds in group company Swaraj Mazda Limited and the 33% stake in Swaraj Engines Limited through the bidding process.

Punjab Tractors has strong brand equity in the tractor market, especially in the northern part of India and the winning bidder could enter the fast-growing tractor segment through this acquisition.

In a related development, of the four front-runners, the Tata Group, uncomfortable with the valuation of the deal, has backed out of the bidding process, while Tractor and Farm Equipment (TAFE) is also believed to have pulled out of the race. The final bids have seen the list of bidders for Punjab Tractors coming down significantly. That list includes Sonalika (International Tractors), Escorts, Italian tractor company Same Duetz-Fahr and a private equity consortium that was backing Punjab Tractors’ former boss Yash Mahajan.

Meanwhile, the Tata Group has acquired a car making plant in Pretoria in South Africa for an undisclosed amount, which will be used as a base for Tata Motors exports to Europe, besides catering to the South African market.

Read the articles in DNA Money and Business Standard.
Related Post: Actis and the Burmans seek re-bids for Punjab Tractors

Actis and the Burmans seek re-bids for Punjab Tractors

Private equity fund Actis and the Burman family, the promoters of Dabur, who together hold a controlling 43.5% in Punjab Tractors (PTL), have rejected offers for the acquisition of their stake from seven interested parties. These companies include Mahindra & Mahindra, Ashok Leyland and Sonalika Tractors and have now been asked to make binding bids by next Monday.

The re-bid was reportedly prompted due to the non-binding nature of the offers. Also, the bids were much lower than the company’s share price, which has shot up around 30% in the month after the bids were invited.

Actis holds 29.5% and the Burmans hold 14% in the Rs. 958-crore tractor company, while the rest is held by financial institutions, the public and banks. Punjab Tractors is India’s fourth-largest tractor making company, with an 8% market share.

Read Business Standard article.
Related Posts:
M&M, TAFE eye Actis’ 29% in Punjab Tractors
M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out
Ashok Leyland bids for Punjab Tractors

Ashok Leyland bids for Punjab Tractors

Truck and bus manufacturing company Ashok Leyland has put in a bid for Punjab Tractors Limited (PTL). With the acquisition of PTL, Ashok Leyland intends to gain access in the tractor business. Ashok Leyland’s tractor foray is part of its bigger strategy of becoming an integrated automotive player.

The company has already been cranking up its component business and has set up a separate auto components division. It is also setting up a new gear manufacturing facility for its component business with special focus on third-party jobs.

Read The Economic Times article.

M&M, Escorts vie for stake in Punjab Tractors; Actis, Burmans to sell out

Mahindra and Mahindra (M&M) has put in a non-binding bid for acquiring stake in Punjab Tractors. The Burman family, which holds a 14.5% stake in Punjab Tractors, is interested in selling its stake in the company. Private equity firm Actis which is another major stakeholder in Punjab Tractors has also put in its 29% stake in Punjab Tractors on the block. The Burmans, promoters of Dabur India, are reportedly interested in selling their stake to the buyer of Actis’ stake in the company. Escorts also has shown interest in buying stake in Punjab Tractors, but has not put in a formal bid yet.

Read the Business Standard articles – 1 2.
Related Post: M&M, TAFE eye Actis’ 29% in Punjab Tractors

M&M, TAFE eye Actis’ 29% in Punjab Tractors

Actis’ 29% stake in India’s most profitable farm tractors and forklifts company, Punjab Tractors Limited (PTL), is probably up for sale. Mahindra & Mahindra (M&M) and Tractor & Farm Equipment (TAFE) seem to be the interested parties. The Burman family of the Dabur group, which holds 14% in PTL, may also exit along with Actis.

Actis’ stake is valued at Rs. 410 crores, but the buyer may also have to pay a control premium. It would also have to make an open offer to the remaining shareholders.

Read the complete Economic Times article.