New Delhi: Three contenders seem to be leading the race in the run-up for purchase of controlling stake in Punjab Tractors Ltd. According to sources, seven players had put in bid for buying Actis' and the Burman family's stake in Punjab Tractors, but Ashok Leyland, the Tata Group and Italian tractor major SAME Deutz-Fahr seem to have emerged as the major contenders.
The other players were Mahindra & Mahindra, TAFE, Sonalika Group and a private equity consortium. It is learnt that the bid put in by the Sonalika Group was disqualified, as the bid price was too low. Sources added that a few bidders might put in higher bids in the final rounds.
Entering new segment
For Ashok Leyland and the Tata Group, the purchase of the stake would signify an entry into the tractor segment. The Tata group is reported to be acting in concert with Fiat, its partner for passenger cars and commercial vehicles, for buying stake in Punjab Tractors. The Fiat chief in a recent visit to India had indicated that his company would partner with the Tata Group to enter the domestic tractor market.
The bidding process is for Actis' 29 per cent and the Burman family's 14.15 per cent stake in Punjab Tractors. The valuation of the same could come to well over Rs 1,000 crore.
Actis had given financial services firm Citi the mandate to call for bids from potential buyers for its stake. The private equity firm had acquired 23.45 per cent of the stake in mid-2003 from the Punjab Government at Rs 153 per share.
PTL, which has a dominant presence in North India, also has a 14 per cent stake in Swaraj Mazda, 33 per cent in Swaraj Engines and 24 per cent in Swaraj Automotives.