By: Topline Securities (Private) Limited
Thanks to the local takeover law, the minority shareholders have made decent gains as a result of big acquisitions in Pakistan. One more takeover that can add value to minority shareholders is the acquisition of Lafarge Pakistan Cement Limited (LPCL) by Bestway Cement (BWCL). Announcement of intention was made in May 2014 and now as per notice issued to the KSE yesterday, public announcement of offer to purchase shares from minority shareholders has been made (which is March 19, 2015 to March 25, 2015).
To recall, in April 2014, LPCL announced intention of Sofimo SAS, a fully-held subsidiary of LPCL’s parent company, to evaluate a potential divestment of its 75.86% indirect holding in LPCL. Due diligence process was initiated by four companies and on Jun 27, 2014, LPCL announced at the local bourses that the company had received final offers from Kohat Cement (KOHC), Bestway Cement (BWCL), DG Khan Cement (DGKC) and Vision Holdings Middle East Ltd. In the end, BWCL came out victorious.
LPCL stock has been in limelight ever since its acquisition story started and has rallied 45% with rising volume. We believe, in coming days, with the emergence of arbitrage-like investment opportunity, LPCL is likely to remain in focus, in line with similar trends observed in other stocks in which tender offer was issued to the minority shareholders.