MUMBAI/HONG KONG -- Tata Sons is buying as much as 20 billion rupees ($312 million) of Tata Motors shares, as India's biggest conglomerate seeks to protect Jaguar Land Rover from potential takeovers by taking greater control of its parent company, a person with knowledge of the matter said.
Tata Sons is the undisclosed purchaser seeking to buy stock equivalent to 1.7 percent of the company in a deal launched 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 Group controlled 34.7 percent of the automaker at the end of June, including shares held through Tata Sons, according to stock exchange filings.
Tata Motors rose as much as 5 percent in Tuesday trading, the biggest intraday gain since July. About 32.35 million shares of the company changed hands in a block trade Tuesday morning.
The conglomerate is aiming to boost its ownership over time in five of its largest businesses, including Tata Motors and Tata Steel, to protect group companies from potential takeover threats, people with knowledge of the matter said in January. Tata Sons bought an additional 1.7 percent stake in Tata Motors before a December shareholder meeting called to remove the automaker's then chairman, Cyrus Mistry, from its board.
Citigroup is managing the purchase of Tata Motors shares, Monday's terms show. The maximum price offered represents a 4 percent premium to the stock's last close on the BSE. Under Indian regulations, Tata Group can buy as much as a 5 percent additional stake each financial year without triggering an open offer.