Gulf Petrochem Wants More of Sah

Gulf Petrochem on Wednesday announced an offer to acquire an additional 26 percent of Sah Petroleums Ltd. from public shareholders. Gulf Petrochem already owns 72 percent of the lubricant supplier.

United Arab Emirates-based Gulf Petrochem (no relation to India-based Gulf Oil) said it will pay Rs 15.7 (U.S. $0.26) per share - significantly below the stocks price for the past two months but a nice premium from this years first quarter.

Gulf Petrochem bought a controlling stake of the company on July 31, a month after signaling its intent to buy up privately and publicly held shares.

Last weeks announcement included Gulf Petrochems first formal statement about its motivation in acquiring Sah. This acquisition fits our strategy to make Gulf Petrochem Group a global conglomerate operating in oil space and to have an integrated portfolio and also extend its capabilities to manufacture, supply and globally distribute a wider variety of products, from base oils to finished lubricants, Managing Director Sudhir Goyel said.

The acquisition became public knowledge in late June when Mumbai-based Sah filed notice of Gulf Petrochems plan on the Bombay Stock Exchange. A month later, Gulf Petrochem bought 72 percent of Sah shares from the Sah family. Now Gulf Petrochem says the offer for publicly held shares is open until Oct. 28.

Sah supplies automotive and industrial lubricants as well as specialty oils and process oils. Since July 30 the price of its stock rose from Rs 15.7 per share to Rs 36 before sliding back to Rs 28.5 yesterday. But from mid-August 2013 until late March of this year, the price hovered between Rs 5 and Rs 10 per share.

Gulf Petrochem has specialized in oil trading and bunkering, oil refining, grease manufacturing, oil storage, bitumen refining, shipping and logistics. It said this is a good time to expand into Indias oil industry.