Bidders for the Punjab State Industrial Development Corporation Ltd's 23.5 per cent stake in Punjab Tractors Ltd are a worried lot.

The threat of competition playing dirty by coming out with a counter offer during the open offer period, if a company successfully bids for the stake, and the lack of clarity over management control are bothering interested tractor firms.

This fear has already claimed a victim with Italian tractor manufacturer Same Deutz-Fahr India opting out of the race.

The Securities and Exchange Board of India guidelines make it mandatory for an open offer to be made if the acquirer's equity stake crosses the threshold 15 per cent limit in any listed company.

"The way the deal is structured, the successful company which buys into Punjab Tractors, may not be the company which may get management control. What stops a competitor from coming out with a counter offer during the period of open offer and gaining control of the company," Kamal Bali, head-marketing, Same Deutz-Fahr, said.

"We were prepared to invest between Rs 375 crore (Rs 3.75 billion) and Rs 470 crore (Rs 4.7 billion) for management control in PTL, but since there is no clarity on this issue we dropped out," Bali said.

Things could get really messy during the open offer if an unsuccessful bidder makes a counter offer for the 16.24 per cent stake of UTI and the 13.91 per cent stake of LIC, according to a Mumbai-based analyst.

The problem with the divestment has been the lack of clarity on what institutions such as Unit Trust of India and Life Insurance Corporation, which between them hold close 30 per cent in PTL, would do with their stakes.

Apart from the two institutions, General Insurance Corporation and its subsidiaries, hold 8 per cent stake, while IDBI holds 7.29 per cent. The total institutional holding in PTL is 45.64 per cent.

"We do not know whether they will sell or retain their stake. They have actually become kingmakers in this deal, because PSIDC has not roped them in as part of the divestment," a tractor manufacturer said.

"It does give a chance for someone to circumvent the selloff process and considering the present offer there is no clarity on management control," Girish Sachdeva, head-marketing, New Holland India Ltd, said.

But some suitors are hopeful that issue will resolve. Mallika Srinivasan, director, Tafe, said, "PTL is a good company, has a good track record and is strategically located. There are some issues that need to be resolved and I am sure they will resolve it."

Vini Mahajan, secretary-divestment, Punjab government, however, told Business Standard that no interested bidder has thus far expressed any such apprehension.

"Nobody has come to us and expressed any such fear," Mahajan said.