The main stock index ended barely changed, closing 0.01 percent, or 0.69 points, weaker at 6,455.12.
Five dealers said Hemas Holdings bought 4.15 million shares, or around 70 percent stake, in J.L Morison Sons and Jones (Ceylon) at 366.50 rupees a share. Shares in Morison rose 10.71 percent to 346.20 rupees a share, while shares in Hemas rose 6 percent to 37.10 rupees.
The deal boosted the day's turnover to 2.56 billion rupees, its highest since May 6 and well above this year's daily average of 1.05 billion rupees.
"The market is not moving as there is no market-moving news and turnover was pushed by block deals in Morison," said a stockbroker who declined to be identified.
The telecom sector index fell 0.99 percent with top fixed-line telephone operator Sri Lanka Telecom PLC falling 1.38 percent and leading mobile phone operator Dialog Axiata PLC sliding 1.06 percent.
Foreign investors were net buyers of 165 million rupees ($1.30 million) worth of shares, extending net foreign inflows this year to 13.55 billion rupees.
The market's 14-day Relative Strength Index (RSI) was still in over-bought territory, at 78.252 on Thursday and has been above the upper neutral level of 70 since April 16, Thomson Reuters data showed.
The rupee edged up at 126.45/50 per dollar, little changed from Wednesday's close of 126.48/55 on thin volume of exporter dollar sales, dealers said.
($1 = 126.5000 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)