Indo Tech Surges on Speculation GE Venture May Buy More Stock

Thursday, Feb 18, 2010

Indo Tech Transformers Ltd., an Indian maker of power transformers, surged the most in almost six months on speculation a venture partly owned by General Electric Co. may buy all the stock it doesn’t already own.

The shares climbed 17 percent to 322 rupees as of 1:32 p.m. local time, after surging as much as 19 percent. Indo Tech was the second-biggest gainer in the 500-member Bombay Stock Exchange BSE500 Index. The number of shares traded was more than 13 times the daily average over the past three months.

Prolec-GE Internacional, a transformer manufacturing venture between GE and Mexico’s Xignux Group, holds 74 percent of Indo Tech, according to data compiled by Bloomberg. The venture last year offered to buy a further 21.2 million Indo Tech shares.

“There is a market expectation that General Electric might come with a second open offer, which may lead to the delisting of the stock,” said Kamlesh Kotak, vice president of research at Asian Markets Securities Pvt. in Mumbai.

Deepali Girdhar, a communications manager at General Electric in New Delhi, declined to comment. Indo Tech executives couldn’t immediately be contacted.

 

Source: Business Week Online