Both the Independent Advisor and the directors of Lanka Aluminium Industries PLC have tagged Mr. Dhammika Perera’s mandatory offer of Rs. 41.50 a share for approximately 66% of the company as unattractive. The offer is already closed and received only minimal acceptances.
The independent advice given by Acuity Partners utilizing three valuation methods concluded that the offer price "is not reasonable" as all the methods employed derived higher valuations than the offer price.
The price/book value based valuation placed the value per share at Rs.105.60, the discounted cash flow valuation placed it at Rs.117.07 and the price earnings valuation at Rs.101.61. Acuity also noted that the last traded market price on February 28 prior to their report was Rs.60.50.
Perera triggered the mandatory offer by acquiring 8.3% of Lanka Aluminium at the Rs.41.50 price on the CSE on January 24. He had previously owned 26.57% of the voting shares of the company and this acquisition raised his holding to 34.9% of the voting shares triggering the mandatory offer rule.
Subsequently, one week after he bought the 8.33%, Perera disposed 145,900 shares (0.06%) at prices between Rs.75 and Rs.79 reducing his current shareholding of the company to 33.84%.
The Independent Advisor‘s report describes Perera as a "well known prominent entrepreneur and investor with business interest in hydro power generation, manufacturing, hospitality, entertainment, banking and finance.’’
In addition to being the Chairman of LB Finance and Deputy Chairman of Royal Ceramics, he is on the boards of several quoted companies, the Sri Lanka Insurance Corporation, Nirmalapura Wind Power (Pvt) Ltd and Alutec Anodising & Machine Tools (Pvt) Ltd.
He is also Secretary to the Ministry of Transport and a director of the Strategic Enterprise Management Agency.