Independent advisor tells AMF shareholders to reject LB Finance offer; acceptance period extended

HNB Investment Bank, acting as the Independent Advisor, has recommended that minority shareholders of Associated Motor Finance Company PLC (AMF) reject the mandatory offer extended by LB Finance PLC.

In a filing to the Colombo Stock Exchange, the advisor stated that the offer price of Rs. 50 per share undervalues the company based on intrinsic valuation methodologies. Concurrently, LB Finance announced an extension of the offer period to November 24, 2025, to facilitate the dispatch of the advisory report.

The Independent Advisor noted that while the Rs. 50 offer stands at a premium to AMF’s Net Asset Value of Rs. 39.91, it represents a substantial discount against other market metrics. The report highlighted that the Peer Price-to-Book Value valuation places the share price at Rs. 89.14, representing a 43.9 percent discount, while the three-month Volume Weighted Average Price of Rs. 83.78 suggests a 40 percent discount.

The mandatory offer was triggered after LB Finance secured a controlling 65.60 percent stake in AMF, purchasing 74.3 million shares from the Dayawansa family at Rs. 50 per share. This acquisition aligns with the Central Bank’s Masterplan for Consolidation of the Non-Bank Financial Institutions sector, with full amalgamation scheduled for completion by March 31, 2027.

Despite the recommendation to reject, the advisor cautioned shareholders regarding liquidity risks. With the public float at 31 percent, significant acceptance by other shareholders could reduce tradability. Shareholders have until 4.30 p.m. on November 24 to make their decision.