In order to raise up to $429 million worth of shares, Daimler has decided to dump its stake in Tata Motors Ltd. Daimler currently controls 25.6 million shares of the company, and is looking to divest for anywhere between 737.4 rupees ($16.2) to 761.3 rupees per share; 4-7% below Monday’s closing price of 796.75 rupees. Tata was not interested in buying the shares, which represent a 5.34 percent stake in the company. The shares will most likely be blocked and sold in portions.
Daimler seeks to rebuild its Western markets after doing away with its dividend for the first time in 14 years due to an abysmal 2009. The holding was strictly financial, as the two groups had no joint ventures or cooperatives in recent years.
“These are block deals and off-market … It should not have any impact on the share price,” said Jatin Chawla, auto analyst with the institutional segment of India Infoline.
The sale in the Tata Group is being handled by Citi Group. Shares in the company have risen 19 percent since Feb. 26, after the company posted a consolidated net profit for the second straight quarter as sales from its Jaguar and Land Rover unit recovered.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)