ABB group, the parent company of ABB India, made a public offer to increase its stake in ABB India. The company wants to increase its stake from approximately 52% to 75%. The buy price being offered is Rs 900 per share (34% premium to May 14 closing price). As per the annoucement, the reason for increasing the stake is “facilitate the long-term development of ABB’s business in India”.
Investors like me, who are investing for long term and practice buy-and-hold philosophy, need to put these types of corporate events under the lens. Buy-and-hold in real life is not blindly holding any stock forever. What it means is; one should continue to hold the stocks as long as it is meeting portfolio objectives. And the investor has an expectation that it will continue down the path.
I have owned ABB shares since 2005. I believe this buyout offer is significant event. I should evaluate if it makes sense for me to continue holding shares in this company. Continue reading rest of this article…
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