Ricoh Co Ltd, the Japanese office documentation major, has announced an open offer to buy a 24 per cent additional stake in Gestetner (India) Ltd in a deal worth Rs 2.75 crore at Rs 32 per share. Ricoh’s subsidiary NRG Group, formerly known as Gestetner Holding, UK, holds a 51 per cent stake in Gestetner India.
“The move is aimed at consolidating its Indian operations,” said an analyst. The open offer also mentioned consolidation as the prime motive behind the move. Ricoh is looking at consolidation before it invests further into its Indian subsidiary, the analyst added.
DSP Merrill Lynch, the manager to the offer, has pegged the offer price at Rs 32 per share. “Gestetner would require better focus, an expansion of its products and services and support from the principal shareholder to improve its performance,” the offer document said.
The offer price of the shares is at a 14.3 per cent premium to Gestetner’s closing price on Monday. It sparked an interest in the counter with the Gestetner share hitting the ceiling limit of 20 per cent to Rs 33.60 today.
The Japanese major will introduce new products through Gestetner only after it gets a stronghold over the Indian subsidiary. It may increase the share price and may mop up more than 24 per cent through the offer, market analysts added.
The share rose above the offer price in today’s trading, rendering the open offer unattractive. The offer document also revealed that Ricoh reserved the right to raise the price till February 18, the last date for a revision.
The offer is open between January 29 and February 27. Industry analysts say that Gestetner India has a sizeable goodwill and brand equity in the markets. Incorporated in 1924, it is a leading manufacturer of office equipment.
Gestetner India is engaged in the manufacture and distribution of digital multifunctional products, including printer, copier, scanner, fax, copyprinters, electric and manual stencil duplicators, accessories and consumables (ink and paper). The company also provides technical and post-sales maintenance services for its machines.