Thursday, April 29, 2010

Arbitrage: Gwalior Chemicals Ltd

Gwalior Chemicals sold its chemical business to lanxess for 500 crs and planning to give 100 cr back to the share holders. First 50 crs was to be given through buyback but the offer price of Rs 120 failed to entice the market and the its market price fell by 10% from Rs 95.

Links to study:

updates on buyback timeline

failed buyback offer

Sale of chemicla plant

The market price is 71,  41% discount  from the buyback price

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