By IANS,
Mumbai: The Reliance Power scrip gained 3.5 percent Monday, a day after the Anil Dhirubhai Ambani Group (ADAG) announced that another group firm, Reliance Natural Resources, was merging with the company.
The boards of the two ADAG energy firms — one in the business of generating power and the other that trades and transports oil and gas — Sunday approved the merger plan in a $11-billion all-stock deal, which involves a swap of four shares of Reliance Natural Resources for every Reliance Power stock.
The Reliance Power stock, which touched its intra-day high soon after the opening bell, rising to Rs.189.80, 8.36 percent higher than its previous close at Rs.175.15, before settling down at Rs.177.95 in afternoon trade.
The Reliance Natural Resources, which had closed Friday at Rs.63.65, tumbled 27.26 percent to Rs.46.30 to come to parity with the price following the 4:1 stock swap agreement.
It had slipped to an intra-day low of Rs.45.80, down 28.51 percent from its previous close.
An equities analyst with a top brokerage firm said at Reliance Power’s trading price range of Rs.175-180, the Reliance Natural Resources scrip would be valued around Rs.44-45.
ADAG has said the deal would bring “substantial benefits” to the shareholders of both the companies.
Meanwhile, Reliance Power Chief Executive J.P. Chalasani told a television channel that the merger “assures gas supply to Reliance Power” as Reliance Natural has finalised a gas supply agreement with Mukesh Ambani-controlled Reliance Industries.
Chalasani said the merger is likely to be concluded in 90 days.