LRI announces unconditional mandatory offer for Lee Hedges minority stake

Lanka Realty Investments PLC (LRI) has formally announced a mandatory offer to acquire the remaining 28.9 percent stake in Lee Hedges PLC, following its acquisition of a controlling interest in the company earlier this month.
The offer, extended to the holders of 7,396,451 ordinary voting shares, is priced at Rs.216.00 per share—the same price at which LRI and its acting-in-concert party Eighth Wonder secured their combined 71.11 percent stake on January 8.
According to the offer document filed with the Colombo Stock Exchange, the offer is “unconditional as to acceptance” from the outset. Under the Takeovers and Mergers Code, an offer becomes unconditional when the acquirer secures more than 50 percent of the voting rights. With LRI and Eighth Wonder already holding a commanding 71.11 percent, the success of the takeover is mathematically guaranteed, leaving the minority shareholders with the choice of cashing out at the offer price or remaining invested in a tightly held entity.
The offer price of Rs.216.00 is set at the highest price paid by the acquirers in the preceding 12 months. However, the market analysts point out that this price represents a discount to the intrinsic value of the company’s assets. As of September 30, 2025, the net asset value per share of Lee Hedges stood at Rs.242.66, meaning the offer allows the acquirers to consolidate full control at approximately 11 percent below the book value of the company’s prime real estate portfolio.
The offer document also details the diversified portfolio of the offeror LRI. Beyond this new acquisition, LRI holds a 51 percent stake in Lanka Realty Developments (Pvt.) Ltd, 100 percent of L & A Quarries (Pvt.) Ltd and an 80 percent stake in Amtrad Ltd.
Notably, the filing highlights LRI’s existing foothold in the commercial real estate sector through its 50.89 percent stake in On’ally Holdings PLC, the owner of Unity Plaza. The document discloses that while LRI holds the majority stake in On’ally Holdings, its voting rights are currently restricted to 43.82 percent, due to an ongoing legal dispute with the Urban Development Authority, regarding the alleged oppression and mismanagement, a restriction LRI is currently appealing in the Supreme Court.
The shareholders of Lee Hedges are expected to receive the detailed offer document within 35 days, outlining the procedures for acceptance. Given the “unconditional” status, LRI is obligated to purchase any validly tendered shares, ensuring immediate liquidity for those opting to exit.