US petroleum giant Chevron is poised to acquire 21% stake in Reliance Petroleum for over US$6 bln (Rs 24,000 crore). This translates to per share price over Rs 250, at roughly a 15% premium on the prevailing market price.
Reliance Industries, the parent company, sold a 5% stake in Reliance Petroleum to Chevron in April 2006 for Rs 1,350 crore with an option to scale up this holding to 29%. It is, however, not clear whether Chevron will buy the stake from Reliance Industries or fresh equity issued by Reliance Petroleum. At the time of selling Chevron the 5% stake, Reliance Industries had made it a co-promoter in Reliance Petroleum. So if Chevron buys the 21% stake from Reliance Industries, it will not trigger the mandatory open offer for another 20% holding in Reliance Petroleum. The open offer will, however, be triggered by a fresh equity issuance.
03-Nov-07 
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