Lankem Ceylon PLC and related parties have been able to increase their ownership stake in ACME Printing & Packaging PLC (ACME) by 53.30 percent to 88.27 percent becoming the controlling shareholder of the company following a successful response to their mandatory offer received from existing shareholders of the company.
Lankem Ceylon PLC in mid-September announced 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 from ACME’s second largest shareholder, Richardson Holdings Ltd., early in the month. The revised offer price was set at Rs.12 per share.
The mandatory offer, which closed on 24th of this month saw most of the minority shareholders accepting the offer allowing Lankem to purchase 22.02 million voting ordinary shares or 53.50 percent stake in the company.
Prior to the mandatory offer period, Lankem and related parties held 33.43 percent stake in ACME, and following the offer, Lankem was able to become the controlling shareholder of the company raising its stake to 88.27 percent by holding 33.33 million shares of the company.
NDB Investment Bank, which was appointed to provide an independent opinion, recommended the shareholders to subscribe to the mandatory offer based on the disclosed information of the company.
“Considering the premiums based on the valuations and the relevant qualitative factors discussed in Section 6.0, NDBIB is of the opinion that, the Offer Price is reasonable to the shareholders of ACME in the current context and NDBIB recommends that shareholders of ACME may accept the Mandatory Offer made by the Offeror,” it stated.
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 the 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 capital infusion while exploring other options such as disposing/selling assets to raise funds for working capital and to reduce debt.
As of 30th of September, Colvis Company Ltd. was the single largest shareholder of ACME with 26.86 percent stake and Capital Trust Holdings Limited was the third largest shareholder with over 15 percent stake.
ACME share closed at Rs.12.50 on Friday.
