Mumbai: GlaxoSmithKline Pte. Ltd. and Horlicks Limited, the promoters of GlaxoSmithKline Consumer Healthcare Ltd., plan to hike stake in the company by 32 percent through an open offer which will start Jan 17.
On successful conclusion of the open offer, the promoters' stake in GlaxoSmithKline Consumer Healthcare Ltd. will increase to 75 percent.
"The open offer will start Jan 17 and close Jan 30, 2013," GlaxoSmithKline has said in a statement.
The parent companies plan to acquire 1.33 crore shares or 31.84 percent of the total equity shares at Rs.3,900 per share to take its holding to 75 percent.
The open offer by the parent companies is at a premium of 28 percent when compared to the closing price of Rs.3,040 recorded Nov 23, a day before the open offer was announced.
Market experts said the offer made by the parent companies is attractive and the small shareholders should participate in it.
Research firm Spark Capital has recommended investors to trim/exit positions in the stock amidst exuberance witnessed in the stock following the announcement of the open offer.
According to a market research firm Spark Capital the adjusted target price of GSKC stock should be Rs.3,458 and the likely fair value post offer price is Rs.2,895.
"The offer price of Rs.3,900 is very attractive and shareholders should grab this opportunity as there is not much left in terms of the price appreciation from here on," said Dinker Shanbhag, head of institutional equities at Lotus Global Equities.
"The stock price of GSKC may witness a sharp fall after the offer closes, as seen in some of the previous voluntary open offers made by multinational companies for its Indian subsidiaries," Shanbhag said.
Research firm Anand Rathi Securities had set a target price of Rs.3,425 for GSKC shares after the voluntary open offer was announced, which is far below the offer price of Rs.3,900.