The mandatory offer announced by Hayleys PLC to purchase the remaining shares of Singer Sri Lanka PLC closed this week with 21.08 percent Singer Sri Lanka shareholders accepting the offer despite the independent advisors recommending the shareholders to reject the offer.
Accordingly, Hayleys and its subsidiaries now effectively control 82.81 percent of the issued shares of Singer Sri Lanka.
This September, Hayleys PLC, acting in concert with its subsidiaries, purchased 231.9 million shares or a 61.73 percent stake in Singer Sri Lanka from Retail Holdings (Sri Lanka) BV for Rs.10.9 billion in a leverage buyout.
The deal triggered the Company Takeovers and Mergers Code 1995 of the Securities and Exchange Commission and a mandatory offer was made to purchase the balance shares in Singer Sri Lanka.
On September 19, Hayleys PLC together with Dhammika Perera, Hayleys Advantis Limited, Hayleys Agriculture Limited and Hayleys Aventura Private Limited—the parties acting in concert—offered to purchase the balance 108.2 million shares or a 28.80 percent stake in Singer Sri Lanka.
The offer was made at Rs.47 a share, the price Hayleys paid to acquire the initial 61.73 percent stake.
Retail Holdings (Sri Lanka) BV, which continues to hold a 9.47 percent stake in Singer Sri Lanka said they wouldn’t accept the offer.
At the time of the initial transaction, Hayleys entered into an agreement with Retail Holdings (Sri Lanka) BV to purchase its remaining shares within 12-15 months of the deal at a price of Rs.47 per share.
An independent advisor report prepared by Acuity Partners to the mandatory offer recommended to Singer Sri Lanka shareholders to reject the offer, given Hayleys Co-Chairman and major shareholder Dhammika Perera’s track record of successful acquisitions and addition of value to improve their performance.