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Philips India rises on parent move to hike stake

Shares of consumer electronics firm Philips India Ltd jumped on Friday after its parent which holds a majority stake, announced an offer to buy out the remaining shares of the company at a price of Rs 105.

At 11:30 a.m., the stock was 5.26 per cent higher at Rs 102, while the Sensex was 0.28 per cent higher at 4,009.37.

Royal Philips Electronics NV which had earlier offered to buy an additional 23 per cent, raised the offer to the remaining 49 per cent on Thursday.

"There are buyers in this share because the parent is hiking the stake and not because they want to avail the buyout offer

price," said a dealer at a local brokerage.

He said for instance a buyer at the National Stock Exchange on Friday would not get physical delivery of the shares before the December 12 offer deadline, so he was unlikely to offer shares to Royal Philips.

Some dealers said the buying was also in anticipation of a hike in the offer price or purchases by Royal Philips from the open market since it seemed keen making Philips India a 100 per cent subsidiary.

"This offer is primarily to offer an exit route to the 80,000 odd small shareholders of the company since the firm's performance has been quite poor," said Raj Kataria, senior vice-president at DSP Merrill Lynch, lead managers to the offer.

Kataria said there was no intention to delist the company's shares though a delisting would be compulsory if the minority shareholding fell below a specific level.

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