Shares of Reliance Industries today gained 3 per cent to close at a one-month high on the Bombay Stock Exchange after reports said its bid to acquire bankrupt LyondellBasell, if successful, would add value to the country’s largest private company.
RIL jumped 4 per cent to a intra-day high of Rs 2,205. It closed up by Rs 70.35, or 3.31 per cent, at Rs 2,195.50.
The company, on Saturday last week, said it has made an USD 12 billion all-cash offer for a controlling interest in the world’s third largest petro-chemical company LyondellBasell that has a market valuation of USD 55 billion.
Analysts believe the acquisition, if successful, would benefit the core business of RIL and it would add to its market capitalisation.
“We would view the acquisition as positive if the total enterprise value remains below USD 12 billion. RIL is adequately funded with USD 4 billion in cash and USD 8 billion in treasury stock, besides access to extra leverage,” CLSA said in its research report for clients.
RIL’s market capitalisation stands at around USD 77 billion (Rs 3,60,000 crore).
The acquisition can be value accretive for RIL, Citi said in a report, adding that even as the acquisition would add to the net debt for FY’11 of RIL, but “within manageable limits”.