Tuesday, September 27, 2011

Mix bag of opinions over OGL mandatory offer

By Channa Fernandopulle

The independent advisors’ report on the mandatory offer by S. H. M. Rishan, together with PCH Holdings Pvt Limited, for Orient Garments PLC has stated that the price offered is unattractive according to the current market price as well as three of the four methodologies used in its valuation.

The  three methods—which concluded the offer price as unattractive— employed by the independent advisor in its valuation were based on the company’s Price to Book Value, Market PER (Price Earnings Ration) and Sector PER.

Based on the market price to book value basis, the offer is at a discount of 22.37% according to the report.
The report has further stated that the offer is at a discount of 17.2% according to the sector price to book value and at a 46.59% discount according to the market price earnings ratio with a share price of Rs.52.43 as at March 31, 2011.

However, the report carried out by B. R. De Silva & Co Chartered Accountants said that according to the Net Assets of the company, the offer of Rs.28.00 per share presents a premium of 148.38% per share.
PCH Holdings and Rishan, its Chairman, acquired a 51% stake in OGL at a total price of nearly Rs.600 million in early August.

OGL was previously owned by the Finco Group. Managing Director of OGL, Priyanjith Weerasooria, at the time of acquisition had stated that OGL was seeking to expand operations into Bangladesh and China and was looking for a partner in this venture.

Weerasooria had been quoted at the time as saying: “Finco group will continue with its remaining 19% stake of the company and I will be on board during this smooth transition period until the company expands in to region.”

In June, OGL started trading at a reference price of Rs.23 when high net-worth investor Dr. T. Senthilverl at the time bought 9 million shares or 16.39% stake at Rs.28 per share in a deal worth Rs.252 million. The company’s issued share capital stands at 54.9 million shares
PCH acquires internet research company

PC House PLC yesterday said that it acquired 90 per cent of Infoserve Private Limited, a Board of Investment approved Sri Lanka based company that provides internet research for Rs.45 million.

Inforserve operates under the brand name "athandz" and specializes in gather, filtering, and summarizing data on behalf of clients to suit their needs.

"This data is gathered by doing extensive research on the internet using both free and paid information sources including search engines, market intelligence portals and specialized and general press website,” PC House said in its disclosure which announced the acquisition.

It also said that the acquisition is in line with the PCH group's stated policy of increasing its reach in the Business Process Outsourcing and Knowledge Process space of the IT industry.

source - www.dailymirror.lk

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