Multinational companies (MNCs) wishing to delist are finding the going tough, due to a sharp rise in the share prices of their Indian subsidiaries.
In the past month, three companies--Goodyear India, Sulzer and Micro Inks--announced an intention to delist, only to find share prices zoom, making the exercise much more expensive.
Analysts say it is not unusual to see punters ramping up the share price of listed arms of multinationals soon after a delisting is announced, in the hope that the offer price would be raised.
More so as, in many instances, multinationals had to actually revise the offer price upwards. For example, MHM Holdings, the parent of Micro Inks, had announced in February that it would delist by acquiring 25 per cent of the latter's shares. It had indicated an offer price of Rs 550 and a floor price of Rs 478. The parent finally had to offer a 16 per cent premium to the offer price.
Similarly, Swiss firm Sulzer wants to delist subsidiary Sulzer India at Rs 870. But, the stock is now trading at Rs 1,189. This is Sulzer's second attempt to delist, the first being in 2007. That offer was withdrawn because the share price rose past the offer price.
Goodyear India's parent, Good Year Tire & Rubber Company, has also announced delisting plans, but is yet to announce the offer price. That has not stopped the surge in the share price. Goodyear India jumped 26.6 per cent after the delisting was announced on February 9.
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