The Tata Group on Tuesday announced it had sold 8,42,865 shares of Forbes Gokak, constituting 6.77 per cent equity, at Rs 80 per share, totalling Rs 6.7 crore.

With this, the Pallonji Mistry Group’s stake in Forbes Gokak has increased to 14.88 per cent from 8.11 per cent earlier. The Pallonji Mistry Group has said that it will voluntarily make an open offer to public shareholders to acquire up to an additional 20 per cent of the equity share capital of Forbes Gokak at the same price of Rs 80 per share paid to the Tata investment companies.

The Tatas’ stake, which earlier stood at 25.06 per cent, now stands reduced to 18.29 per cent. The Tatas had a direct holding of 14.82 per cent in Forbes Gokak, held by Tata Sons, Ewart Investments, Tata Investment Corporation and Bambino Investments, which is now at 8.05 per cent.

The Tatas have sold the entire holdings held by Tata Sons, Ewart Investments and Bambino Investments and part of the holding of Tata Investment Corporation. The remaining 8.05 per cent held by Tata Investment Corporation will be divested later.

Sources said the Tatas will not participate in the open offer that will be made by the Pallonji Mistry Group. Instead, the remaining 8.05 per cent will be warehoused with a third party for the time being.

After the Pallonji Mistry Group has hiked its stake to 34.88 per cent, i.e., after acquiring 20 per cent through the open offer route, it will buy the remaining 8.05 per cent of the Tatas in a separate deal.

"Since the shares received under the open offer will be accepted on a pro rata basis, the entire 8.05 per cent held by the Tatas will not be accepted and they will be left with a fractional holding. Entering into a separate deal after the open offer closes is the best way out," said a merchant banker.

Once the entire exercise has been completed, the Pallonji Mistry will have increased its direct holding to 42.93 per cent.