Adam Investments Ltd. (AINV) last week concluded the mandatory offer on PC Pharma Plc (PCP), with almost no sellers.
AINV said when the mandatory offer closed, shareholder/s owning only 1,000 shares had accepted the offer made at Rs. 1.70 per share. This amounted to an insignificant 0.001%. Prior to the offer, AINV held 31.152% whilst it acquired 1.416 million PCP shares or 1.4% from the trading floor.
Analysts said the majority of the minority shareholders not wanting to sell either reflected they felt the PCP share is worth more or they had confidence of greater future upside.
The AINV-PCP had the dubious distinction of being the first time when the offeror sold the stake to the market whilst a mandatory offer to buy remaining shareholding was on. However the sale was reversed by the SEC on the grounds that AINV violated rules which require an offeror not to sell during an offer without obtaining approval.
AINV which accepted the error was asked to compensate any buyer who may have suffered a loss in view of the reversal.
AINV sold its majority stake at prices higher than the mandatory offer and from levels from which it originally acquired the stake. Analysts viewed least interest in sellers in the mandatory offer could be because shareholders felt AINV will remain long-term focused following the SEC’s reversal of the sale.
AINV had cited several reasons why it tried to sell, including the fact that PCP and its parent PCH Holdings on which too a mandatory offer was on was facing multiple legal battles with allegations of a key subsidiary being sold by PCHH Chairman M. Rishan and AINV claiming the subsidiary as an asset in the mandatory offer.