Golden Tobacco locked at 5% UC

Golden Tobacco opened 5% high at Rs.54.95 and was locked at this upper circuit immediately.

The stock has lighted up today after the promoter made an open offer to buy out 25% stake at double the current price.

Promoters – Plus Corporate Ventures, director Pramod Jain and J.P. Financial Services announced through a newspaper advertisement that they plan to buy a total of 44 lakh shares at a price of Rs.101/share.

The offer begins on 14th Feb and ends on 5th March.

If one may recollect, way back in 2009, Pramod Jain had made an open offer to acquire the same 44 lakh shares and that too at the same price, Rs.101/share. Later, citing various reasons – poor management, high cost of acquisition and also went on to allege that promoters had resorted to tactics to prevent this takeover from happening. There were also allegations made of the management systematically siphoning off funds, depleting the value of its fixed assets and eroding net worth. Following this, SEBI had initiated an inquiry and found no merit in the need to withdraw the open offer and had directed to make the open offer. That was in 2012 and looks like the saga of the tussle between Jain and Sanjay Dalmia continues.