Educomp continues to spike up

Educomp has hit the upper circuit yesterday at Rs.27.75 and today, it opened at Rs.29.40, up over 5.5%, with an intra day high at Rs.30.40. Volumes have jumped up 4.5 times.

The company which is mired in debt, corporate governance issues and poor financial performance, is in the limelight today on unconfirmed market rumours that a US based company is an advanced stage of negotiation for buying a majority stake in Educomp. The grapevine has it that the US company might acquire 40% stake where the promoters stake is 44.79% thus triggering an open offer. The deal is said to be struck at around Rs.1800 crore. The huge debt of Rs.2500 crore would also be taken over by the company.

Though the company yesterday issued a clarification stating that there was no such development in the stock, the market refuses to pay heed and the stock price continues to spurt up.