Acquisition of IPCL by Reliance
The expected had happened unexpectedly. While everyone expected Reliance to bid
for IPCL aggressively, but what an aggression!!
The results of the bid, for 26%of equity, announced on 18th May 2002, were:
Rupees/share
Reliance Industries Ltd (RIL) 231
Indian Oil Corp (IOC) 131
Nirma 110
The bid price was at a 74% premium to IPCL’s last traded price.
There were wide spread speculations on why Reliance bid was so higher than the other
bidders.
One newspaper had the explanation :
"Market circles are still struggling to come to terms with the surprise of Reliance bidding so
aggressively for IPCL. The bid - more than twice the reserve price when the rivals were under it -
is certainly not characteristic of RIL, which has established a reputation as a conservative bidder,
whether in privatisation deals or in telecom licenses. So what explains the exception? The RIL
grapevine has it that after the consultants had submitted their valuation of......
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