Piramal Glass Ceylon’s Indian parent exiting SL company in a INR 5.17 mn. deal

No word yet on the per share value of the transaction relevant to a mandatory offer

Piramal Glass Ceylon PLC Friday announced through a Stock Exchange filing that its Indian parent, Piramal Glass Private Ltd., was exiting the Sri Lanka company having entered into a sale and purchase agreement with another Indian company, Mumbai-based Pristine Glass Private Ltd. at a multi-billion Indian rupee price.

The consideration for the transaction, according to the disclosure is Indian rupees 5.166 billion for the total 536.33 million shares held in the Sri Lanka company by its Indian parent.

The deal involving the Sri Lanka company is believed to be part of a billion dollar mega deal under negotiation with the Blackstone Group Inc. of the U.S. was reported to be poised to buy Piramal Enterprises, Bloomberg reported on Nov. 11.

The Indian parent owns 56.45% of the Sri Lanka company with the EPF as the second largest shareholder with 9.51%. There was no word on Friday what the disclosed price for the total holding of Piramal India in the Sri Lanka company would amount to in per share terms.

“The acquisition of as much as 56.45% of the Sri Lanka company will trigger the SEC’s mandatory offer rule under mergers and acquisitions and the buyer will be required to make a mandatory offer to minority shareholders of the price he paid for the majority shares,” an analyst explained.

“Various brokers are mentioning different prices but we don’t have any clear word yet on what the Sri Lanka rupee price per share of the local company would be,” he said.

Piramal closed the week on the CSE at Rs. 9.50 trading at a range of Rs. 9.20 to Rs.10.80, up from the previous close of Rs. 8.70, with 108.47 million shares traded, amounting to 36% of the days turnover, brokers said. There has been a flurry of retail interest in the share, and consequential price gains, brokers said.

Responding to a Stock Exchange query in early December, Piramal Glass Ceylon said that their major shareholder “regularly evaluates potential opportunities in relation to its investment in the company” and that “if any disclosable event were to occur, we will announce any price sensitive information.”