Wimco hit its upper ceiling at Rs 29.40 on Tuesday on market talk that the parent may be asked to make an open offer for added stake in the company.

By 15:10 IST, the outstanding buy position on the counter of the multinational maker of matches was 8,446 shares. Relatively high volumes of over 296,000 shares were recorded on the counter. In the 10 sessions between 27 January and 17 February 2003, the scrip of Wimco jumped 56% to Rs 24.50 from Rs 15.70.

As per market buzz, the open offer will be made at Rs 35 per share, a 19.04% premium to the current market price.

The market has it that the Securities Appellate Tribunal has upheld Sebi's decision compelling parent Swedish Match to make an open offer to acquire 20% stake from shareholders.

Swedish Match now solely controls 74% stake in Wimco after it acquired 21.89% voting rights from the Jatias on 27 September 2001. Prior to that, Swedish Match owned 52.11% stake in Wimco. The announcement of the acquisition was not followed up by an announcement of public offer. Sebi then issued a show cause notice to Swedish Match asking the company to make a public offer as per the requirements of the Takeover Regulations, taking 27 September 2000 as the date for calculation of the offer price.

The regulator also directed Swedish Match to pay interest at the rate of 15% on the offer price to shareholders of Wimco, for the loss of interest caused from 27 January 2001 till the actual date of payment of consideration.

Incorporated in 1923 as The Western India Match Company, Wimco got its present name in 1973 when it diversified into other areas. A part of the reputed Jatia group of industries, it is managed by chairman R G N Swamy and managing directors S G A Flapper and Shivkumar Jatia.

Its product portfolio includes safety matches, tomato paste, fruit concentrates, and agro farm forestry. Its client list includes Nestle, Glaxo and Lipton. Its subsidiaries are Sunsip, Clean Foods Corporation, Wimco Exports and Wimco International.

The company also has a sizeable export turnover through exports to Africa, South America, West Asia, Japan, Europe, Australia, and other countries. It tied up with Heinz India Pvt Ltd to produce tomato paste.

For the third quarter ended 31 December 2002, Wimco recorded a 49% fall in net profit to Rs 1.48 crore on an 8.4% drop in net sales to Rs 42.13 crore.

As on 31 December 2002, promoters held 74% stake in Wimco, while the public, institutions and foreign bodies held 16%, 8.28% and 0.12%, respectively.