GlaxoSmithKline Pharmaceuticals - What is this Open Offer?

#1
Hi

I am wondering that if GSK open offer price is 3100 then why the GSK shares are selling 150 rs less at 2950? Cause it's certainly going to hit 3100. Read various newspaper reports but could not find any answers.

Will it be good to buy this share at 2950 and later sell it at 3100 in Feb (advantage of 5-6%)? Any risks?

Thanks
-R
 

Alchemist

Administrator
Staff member
#2
Firstly, the open offer is not for 100% of the public float.

Only a part of the shares held by the public will be accepted.

It is expected that many long-term shareholders won't tender their shares and the acceptance ratio will be somewhere around 80%-90%.

Also, if you buy now and sell at 3100 to the promoters, you will have to pay capital gains tax.

The applicable tax rate will be higher as the sell transaction will not be a stock market transaction.
 
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