Blackstone Capital acquires controlling stake in Piramel Glass for Rs. 6.2 billion

By Hiran H.Senewiratne 

US-based Blackstone Capital acquired CSE listed Piramal Glass (Pvt) Ltd. for a consideration of  Rs. 6.2 billion. Blackstone Capital purchased a controlling stake in a transaction by way of a crossing, stock market analysts said.

A mandatory offer is expected to follow with Blackstone getting a 56 percent stake in the firm, through PGP Glass. This transaction was a crossing in the CSE, which contributed more than 88 percent to the turnover, stock analysts  said.  

PGP Glass, a Blackstone unit, purchased India’s Piramal Glass and several affiliated companies including the Sri Lanka firm.

The new owners have the know-how to develop the glass firmly and boost exports, analysts say.”Blackstone is interested in the export potential of Piramal Glass,” they explained.

Meanwhile, Asia Securities said in a press release:’Asia Securities Advisors (Pvt) Ltd. acted as the buy-side advisor and Asia Securities (Pvt) Ltd acted as the executing stockbroker to the Blackstone Group in its landmark acquisition of Piramal Glass Ceylon PLC. This transaction reaffirms Asia Securities’ position as the preferred investment banking and stockbroking partner to the most sophisticated investors for cross-border M&A transactions in Sri Lanka. The acquisition price implies a total enterprise value of LKR 13.9 Billion for the target company.’

Blackstone had acquired Gerresheimer AG, a German glass and plastics packaging maker for pharmaceuticals in 2004, developed it and earned a 7.5 times return in about four years.

Amid those developments the CSE yesterday indicated mixed reactions. The All Share Price Index went down by 12.57 points and S and P SL20 rose by 6.76 points. Turnover stood at Rs. 7.45 billion with three crossings. Main crossings happened in Piramal Glass (Pvt) Ltd, which crossed  6536 million shares to the tune of Rs. 6.2 billion, its shares traded at Rs. 11.60, Hayleys 500,000 shares crossed for Rs. 31 million, its shares traded at Rs. 62 and Kandy Hotel 4.2 million shares crossed for Rs. 23.1 million, its shares trading at Rs. 5.50.

In the retail market, five companies that mainly contributed to the turnover were; Piramal Glass (Pvt) Ltd. Rs. 313 million (28.5 million shares traded), JKH Rs. 181.7 million (1.2 million shares traded), Commercial Bank Rs. 82.2 million (910,000 shares traded), Sampath Bank Rs. 78 million (1.37 million shares traded) and HNB Rs. 67.6 million (319,000 shares traded), During day 619 million share volumes traded in 10730 transactions.

With the recording of foreign selling mainly in Commercial Bank, HNB and Sampath Bank on the previous day, investors were a bit careful in purchasing those stocks.  However, Commercial Bank, Sampath Bank and HNB have announced exclusive  dividend schemes, where the shareholders are entitled to a certain number of shares who have made share purchases before March 30. Since  Piramal Glass (Pvt) Ltd contributed more than 88 percent to the turnover all other companies contributed only Rs. 916 million.   

Sri Lanka’s rupee quoted weaker at 199.50/201 to the one week US dollar on Tuesday, while yields remained unchanged in dull market trade, dealers said. The rupee last closed in the one-week forward market at 199.25/75 to the US dollar on Monday.