Shares of Jet Airways rose as much as 4.1 per cent after market regulator Sebi said Etihad Airways’ purchase of a 24 per cent stake in Jet Airways (India) Ltd did not amount to a change in ownership and ruled the Abu Dhabi-based carrier does not need to make an open offer for shares in the domestic carrier.
This cleared a legal hurdle for Jet-Etihad deal although the stake sale has been completed. This would pave the way for higher cooperation between the two airlines.
The ruling comes after Sebi had issued a show cause notice to Etihad in February asking the Abu Dhabi airline on why it should not have to make a tender offer to Jet public shareholders as part of India’s takeover code.
Despite the Sebi ruling, JP Morgan maintains an underweight rating on Jet, citing increasing completion. JP Morgan has a target at Rs. 206 on Jet.