Tata Sons boosting stake in Jaguar Land Rover owner: source

[MUMBAI] Tata Sons Ltd is buying as much as 20 billion rupees (S$420 million) of Tata Motors Ltd shares, as India's biggest conglomerate seeks greater control of the Jaguar Land Rover owner, a person with knowledge of the matter said.

Tata Sons is the undisclosed purchaser seeking to buy stock equivalent to 1.7 per cent of the company in a deal launched on Monday evening, said the person, who asked not to be identified because the details are private. The investor was offering to purchase Tata Motors shares for as much as 421.56 rupees apiece, according to terms for the deal obtained by Bloomberg.

Tata Motors rose as much as 5 per cent in Tuesday trading, the biggest intraday gain since July. About 32.35 million shares of the company changed hands in a block trade on Tuesday morning.

The conglomerate is aiming to boost its ownership over time in five of its largest businesses, including Tata Motors and Tata Steel Ltd, to protect group companies from potential takeover threats, people with knowledge of the matter said in January. Tata Sons bought an additional 1.7 per cent stake in Tata Motors before a December shareholder meeting called to remove the carmaker's then chairman, Cyrus Mistry, from its board.

Citigroup Inc is managing the purchase of Tata Motors shares, Monday's terms show. The maximum price offered represents a 4 per cent premium to the stock's last close on the BSE (Bombay Stock Exchange). Under Indian regulations, Tata Group can buy as much as a 5 per cent additional stake each financial year without triggering an open offer.

Tata Group controlled 34.7 per cent of the carmaker at the end of June, including shares held through Tata Sons, according to stock exchange filings.

BLOOMBERG