Daimler Sells Tata Stake; Tata Plunges
NEW YORK (
) --
Daimler
( DAI) is selling its entire stake in
Tata Motors
(TTM) - Get Report
to raise up to $429 million, according to
Reuters.
Daimler is putting up 25.6 million shares in Tata at 737.4 ($16.20) to 761.3 rupees each, a discount of 4 to 7% beneath the stock's Monday settlement, according to
Reuters.
Daimler owns about 5.3% of Tata's ordinary shares and about 4.7% on a fully diluted basis, according to
Reuters.
The automaker owns 25.6 million shares of Tata and is relinquishing them after more than 50 years of ownership, according to
Bloomberg
.
Citigroup
(C) - Get Report
is overseeing the sale.
"The stake hasn't taken Daimler anywhere in the last 40 years or so, and having cash these days is a luxury," Arndt Ellinghorst, an analyst with
Credit Suisse
(CS) - Get Report
in London told
Bloomberg.
Ellinghorst said that Daimler is occupied with new truck ventures in Russia and the search for a small-cars partner, and is likely going for a more streamlined portfolio.
Daimler is selling its shares in India's biggest automaker amid record car sales in India in February. The buying frenzy has in part been attributed to buyers trying to grab cars before interest rates move higher.
Daimler shares have risen 0.5% to $45.30 Monday morning, while Tata American Depository receipts have plunged 4.3% to $17.80 following news of the sale.
-- Reported by Andrea Tse in New York
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