Lankem applies to SEC to revise offer price for ACME

Lankem Ceylon PLC last Friday filed a mandatory offer to acquire the remaining ordinary voting shares of ACME Printing & Packaging PLC (ACME) following the acquisition of 19.43 percent stake by its associate, E.B. Creasy & Company PLC early this month.

Early this month, ACME’s second largest shareholder Richardson Holdings Ltd. disposed its 19.43 percent stake in the firm to E.B. Creasy and Co. for Rs.96 million.

According to the mandatory offer document filed with the Colombo Stock Exchange (CSE), LCEY and related parties held 13.24 million voting ordinary shares of ACME constituting to 32.17 percent stake including 7.86 percent direct stake held by LCEY in the company as of 16th of this month. 

Consequently, LCEY became obliged in terms of rule 31(1)(a) of the Company Takeovers and Mergers code 1995 (as amended in 2003) to make an offer to the remaining shareholders of the said company to purchase the balance ordinary voting shares in issue amounting to 27.92 million constituting 67.83 percent stake  at Rs.12.20  per share (being the highest price paid by LCEY  for the shares of ACME on the 10th of this month).

However, Lankem submitted an application with the SEC on 16th of this month to revise down the offered price per share to Rs.12.

“The offeror has made an application to the SEC on 16th September 2021 to revise the offer price to Rs.12.00 per share since the transactions at a higher price were for a very small number of shares. The SEC approval is pending on adjusting the offer price to
Rs.12.00 per share,” the document read.

The company is required to circulate a  detailed mandatory offer document to all shareholders of the offeree within thirty five (35) days from the date of incurring the obligation to make the mandatory offer.

Lankem has already ventured into the FMCG and printing and packaging segments investing in firms such as C.W. Mackie PLC and J.F. Packaging Limited.

The Colombo Fort Land & Building PLC is the immediate and ultimate holding company of Lankem Ceylon PLC and E.B. Creasy & Company PLC and ultimate parent of Union Commodities (Pvt) Limited.

Amidst rising raw material prices and difficulties in importing raw materials coupled with constraints on working capital, ACME was operating in a challenging environment and therefore was looking for a capital infusion while exploring other options such as disposing/selling assets to raise funds for working capital and to reduce debt. 

Meanwhile, according to recent stock filings, Capital Trust Holdings Limited also increased its stake to 16.02 percent as of 14th September. Earlier, Colvis Company Ltd. was the largest shareholder of ACME with 27 percent stake.