Home / Front Page/ Hayleys to buy Singer Sri Lanka control for Rs. 11 b in biggest ever acquisition

Hayleys to buy Singer Sri Lanka control for Rs. 11 b in biggest ever acquisition


Comments / {{hitsCtrl.values.hits}} Views / Thursday, 14 September 2017 00:26


Export-rich diversified blue chip Hayleys Plc yesterday announced the country’s biggest ever acquisition - control of consumer durables giant Singer Sri Lanka Plc for Rs. 11 billion. 

In a filing with the Colombo Stock Exchange (CSE), Hayleys said yesterday it entered into an agreement to buy 61.73% stake or 231.86 million shares of Singer Sri Lanka at Rs. 47 per share in a deal worth Rs. 10.89 billion from the latter’s parent Retail Holdings (Sri Lanka) BV.

Hayleys also entered into a further agreement to purchase either by itself or through nominees a further 9.47% being the balance shareholding of Retail Holdings Sri Lanka BV at Rs. 47 per share by itself or through its nominees within 12-15 months from the original transaction for 61.73% stake.  “Hayleys Group has been exploring opportunities in the consumer and retail sector and had been having negotiations with Retail Holdings,” Hayleys said in its disclosure. 

The deal strike price was at a slight premium to trading value of Singer shares which was Rs. 44.40 on Friday. However, certain brokers and investors got wind of the confidential deal in the making, prompting the Singer share price on Monday to gain by Rs. 8.10 to close at Rs. 52.50 after touching a high of Rs. 53.50. Only just above half a million Singer shares traded on Monday for a Rs. 28.8 million turnover. 

The sharp rise of relatively illiquid Singer shares was due to those speculators aiming to cash in the mandatory offer following the acquisition of controlling stake. 

Trading on both Singer and Hayleys was suspended by the CSE yesterday pending clarification of speculation. 

Punters did not bet on a possible upside on Hayleys share as it closed on Monday lower by Rs. 2.40 to Rs. 274.60 after touching an intra-day high of Rs. 276. 

Singer’s 52-week highest price is Rs. 149.90 and the lowest was Rs. 43. At the Company level Singer’s net asset value per share is Rs. 14.07 whilst at the Group level it was Rs. 20.22 as of June 2017, down from Rs. 15.80 and Rs. 21.71 as of December 2016.

Hayleys will make a mandatory offer to buy the remaining shareholding after the transaction goes through, which is expected to be on Friday as speculated by the market. 

The public shareholding of Singer Sri Lanka is 28.80% held by 2,468 shareholders. Major shareholders include several foreign funds. The biggest local shareholder is Ceybank Unity Trust with 3.25% stake.

The Singer Group (which includes Regnis Lanka Plc and Singer Industries Plc) revenue in the first half of 2017 increased by 13.6% to Rs. 25.1 billion, compared to the same period last year. The growth is despite tough business conditions. However, lower margins and higher interest both impacted group profitability in the first half. Group net profit for the first half was Rs. 666.5 million, a reduction of 27% compared to the prior year (excluding the one-time gain in first half, 2016).  

Group net profit for first half was Rs. 666.5 million, a reduction of 27% compared to the previous year (excluding the one-time gain in first half, 2016). In the case of the company, net profit for the first half was Rs. 525.5 million, a decrease of 26%.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

A brief guide to the legal system of China

Thursday, 21 June 2018

The law of the People’s Republic of China (PRC) is officially referred to as the “socialist legal system with Chinese characteristics”. The formation and development of the socialist legal system with Chinese characteristics are compatible with


The evolution of CSR towards Creating Integrated Value

Thursday, 21 June 2018

Creating Integrated Value (CIV), a term that I coined in 2014, is a concept and practice that has emerged from a long tradition of exploring the role of business in society. It has roots in what many today call corporate (social) responsibility or CS


Let’s educate ourselves for change!

Thursday, 21 June 2018

Ordinary Level Examinations are over. Results are in. What should I be doing at Advanced Level? Science, Commerce or Arts? And what subject combinations? This always is a burning question for some and also for parents. This question is usually answe


Dudley Senanayake, the principled leader who was never power hungry

Thursday, 21 June 2018

Though I have seen Dudley Senanayake speaking in meetings, my first face-to-face meeting with him took place in 1970. Given that it was immediately after United National Party’s crushing defeat at the general election, he was in a very sombre mood.


Columnists More