A few block deals on TV Today shares are likely to be witnessed in the next few days, as Reliance Capital is likely to pick up some stake from existing shareholders of the company, said sources close to the development.
Reliance Capital has announced an open offer for 20 per cent shares of the company at Rs 130.50 per share. The shares of the company closed at Rs 143.40 on Friday on the National Stock Exchange.
A research head of one of the bigger brokerage houses in India said on conditions of anonymity: "An open offer below the market price indicates the non-seriousness of the offer. It is likely that Reliance Capital will pick up some stake, but as it might cross the 15 per cent limit the company has decided to make an open offer in advance." The offer opens on June 6, 2007 and closes on June 25, 2007.
G Krishnan chief executive officer of TV Today Network said that he couldn't comment on the issue. "It's their (Reliance Capital) release and you should talk to them on this," he said. He further refused to comment on whether TV Today perceives the offer as hostile.
A Reliance Capital spokesperson also refused to comment on the issue of the offer price being lower than the current market price. He added that the pricing follows all the rules and guidelines on the subject.
The promoters of the company hold 55.69 per cent while Reliance Capital holds 11.93 per cent acquired on February 28, 2007. Incidentally the TV Today board had decided to abandon a planned buy-back of shares in January 2007.
As of December 31, 2006 Life Insurance Corporation held 3.7 per cent in TV Today, with ICICI Bank holding 1.51 per cent, Citigroup holding 2.13 per cent and Rakesh Jhunjhunwala holding 1.88 per cent. These holdings might have changed by now, but these shareholders are the likely candidates from whom Reliance Capital may buy through the market.