Both the Hayleys director board and the Independent Advisors’ Report have concluded that the mandatory offer price offered by Royal Ceramics Plc (RCL) and investor Dhammika Perera is not ‘attractive’.
RCL and Dhammika Perera triggered the mandatory code in January, crossing the 30 percent threshold to acquire all remaining shares of Halyleys not owned by them. The price they offered per a share was Rs.380.
“Based on the value indications given above and the trading prices of ordinary shares of Hayleys as at March 1, 2011, it is our opinion that the mandatory offer price of Rs.380 offered by the offerors to HAYL’s remaining shareholders, appears to be unattractive at present” the Independent Advisors’ report done by Ernst & Young noted.
In arriving at this conclusion, Ernst & Young has given prominence to closing market prices of Hayleys shares during the past three months. Accordingly, the director board of Hayleys has also arrived at the decision that the offer price by the RCL and Dhammika Perera was not ‘attractive’.
“The rules also require Hayleys PLC to give shareholders the company views, comments and advice on the offer document, and also advice given by the independent advisors. The directors pursuant to examining the independent advice and the opinion expressed by the independent advisor in their document are of the view that the offer price of Rs.380 is unattractive,” a note send by the Hayleys board to the company’s shareholders said.
It further said that offerors Dhammika Perera and Nimal Perera, Managing Director of RCL, who are directors of Hayleys were excluded when arriving at this decision.
It is believed that the business plan of Dhammika and Nimal is to acquire 51 percent of Hayleys and establish control in the asset-rich and one of the oldest diversified blue chips in the country.
Dhammika Perera’s holding in Hayleys presently is around 28 percent and RCL holds around 2 percent. The cost of acquiring the 21% stake amounts to 16 million shares at Rs.380 is estimated to be around Rs. 6 billion. The issued share of Hayleys stands at 75 million.
The former Chairmen and the directors of Hayleys had used various kinds of strategies to make Hayleys impenetrable when it comes to takeover bids. Even at present, the Employee share arrangement of Hayleys (ESOP) owns nearly 9 percent of the company, while the former Hayleys Chairman’s Jayasundara Trust holds 11 percent.
source - www.dailymirror.lk
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