A billion rupee deal on Pelwatte Sugar with a Distilleries’ subsidiary acquiring 47% sent turnover on the Colombo bourse up to Rs.2.8 billion, down from the previous day’s Rs.2.98 billion, with both indices gaining marginally – the All Share by 9.65 points (0.13%) and the Milanka by 17.72 points (0.26%) with 82 gainers running behind 102 losers.
Distilleries made this move through a company called Melstacorp (Pvt) Ltd., described in a Stock Exchange filing as a 100% subsidiary, purchasing nearly 32 million shares comprising 47% of Pelwatte at a price of Rs.27.50 per share.
There was no word on whether Distilleries and/or related parties/companies the necessary shares for absolute control; but brokers and analysts said that it was unlikely that any party will commit over a billion rupees without control.
They noted that Master Divers and Capt. Ariyaseela Wickramanayake who controlled Pelwatte with over 80% of the company had not totally sold out adding that a mandatory offer at the Rs. 27.50 price under the SEC’s Takeovers and Mergers Code must now follow.
Other than this mega deal, Watapota (Guardian Capital Partners) saw 1.3 million shares done between Rs.280 and Rs.339 gaining Rs.76.70 to close at Rs.318 contributing Rs.409 million to the day’s business volume.
Watapota a member of the Carsons group listed 25.2 million new shares on Wednesday after a rights issue of 75 for every two shares held.
"There was massive retail play on Watapota yesterday," Prashan Fernando of Acuity Stockbrokers said. "Other than for Pelwatte and trading in Watapota, the market was somewhat sluggish with these two counters accounting for Rs.1.5 billion of the day’s turnover.’’
Analysts noted there were synergies between Distilleries and Pelwatte as potable alcohol is a by-product of sugar manufacture.
Pelwatte is also into large scale dairy development, an area in which Lanka Milk Foods which owns 12% of Distilleries and is part of the Harry Jayewardene portfolio, is focused on.
Distilleries was up Rs.1.70 yesterday to close at Rs.181.50 on nearly 0.6 million shares traded between Rs.180 and Rs.183.
Crossings yesterday included 51,900 Ceylinco Insurance at Rs.730, 250,000 Distilleries at Rs.183, 530,000 Lanka Walltiles at Rs.175 and 5.2 million Nation Lanka Finance rights at Rs. 3.90.
Ascot with nearly 0.6 million shares traded between Rs.95 and Rs.109.90 was up Rs.11.40 to close at Rs.10 while Central Finance lost Rs.75.20 to close at Rs.1,040 on 56,400 shares.
LB Finance too lost some steam declining Rs.8.20 to close at Rs.182 on nearly 0.3 million shares.
source - www.island.lk
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