Escorts hits 52 week high as Japan's Kubota to raise stake
Published On: Thursday, November 18, 2021 | By: Team KnowMyStock
Shares of Tractor and farm equipment maker Escorts Ltd touched a 52-week high of Rs 1,793.15, rising 9 percent intraday on November 18 after Japan-based Kubota Corporation acquired a stake in the company. Kubota Corporation announced that Kubota and Escorts Limited (EL) have reached an agreement under which Kubota will increase its shareholding in EL by March 31, 2022, by means of subscription to third-party preferential primary share allotment and open offer bid. According to a release issued by Escorts to the BSE, the company has raised Rs 1,872.74 crore by way of preferential issue of 96.64 lakh equity shares to Kubota at Rs 2,000 per share. In addition, Kubota will make an open offer at a preferential allotment price of Rs 7500 crore. Kubota corporation holds 9.09% stake in the company as of September 2021. Post preferential allotment, the Japanese partner's investment in the company be 14.99%, it said.
"Kubota takeover is positive for Escorts, as it will result in technology/new product support for Agri and Construction Equipment divisions. Exports can also receive a boost as a result of the widening product portfolio and utilization of the global Kubota distribution network.
The board accorded its approval to change the name of the company from “Escorts Limited” to “Escorts Kubota Limited” or any other name containing the trade names “Escorts” and “Kubota” as may be approved by the Central Registration Centre (“CRC”), RoC and other regulatory authorities.
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