For some speculators and investors there is little to toast in the Harry-Ari deal on Pelwatte Sugar (SUGA) as the stock came under the SEC’s price band yesterday for the period 25 March to 7 April.
Pelwatte closed last week at Rs. 34.10 whilst yesterday it peaked to a high of Rs. 38 before closing at Rs. 35, down by Rs. 1.70. However on Tuesday it peaked to Rs. 44.50, below its 52-week highest of Rs. 50.Yesterday’s sale of control (around 51%) in Pelwatte by Managing Director Ariyaseela Wickramanayake at Rs. 27.50 is after on Tuesday his divesting 4% stake at a price ranging Rs. 37.10 and Rs. 40.10.
Analysts were critical of the part sale by Wickramanayake perhaps to satisfy hungry speculative investors in the market on Tuesday who were triggered by rumours of a deal. Wickramanayake perhaps knew or had a rough idea of the probable strike price of the deal whereas buyers had no knowledge. To effect the deal at the pre-determined price, Wickramanayake had to feed the market to sell down from a higher price level.