Japanese consumer durables major Panasonic Corporation has acquired 16.95 per cent equity stake held by Indian partner P Obul Reddy Group in its public listed Indian arm Panasonic Appliances India Ltd, as part of its efforts to consolidate promoter shareholding and thereafter delist the arm from Indian bourses, as per a stock market disclosure.
Panasonic acquired 1.66 million equity shares, representing the entire 16.95 per cent stake of the local co-promoter for Rs 26.22 crore (approximately $4.2 million). The transaction happened at Rs 158 a share.
Following the stake acquisition, the Japanese promoter’s shareholding has now increased to 74.22 per cent.
Meanwhile, Harshad Reddy resigned as a board of director of the company following the transfer/sale shares held by P Obul Reddy Group.
The board of Panasonic Appliances has already given approval to the proposal of Panasonic Corp to voluntary delist the Indian arm in Indian stock exchanges. The company will now seek its shareholders’ approval for the same in a board meeting to be held on October 28, 2014.
The Japanese firm would be looking to buy 2.53 million shares that it doesn’t own and would need to buy at least 1.55 million shares to reach the delisting threshold of 90 per cent holding.
At the price at which it bought shares from the Reddy group it would need to shell out Rs 24.5 crore to achieve this and Rs 40 crore to complete the buyout, provided all the shares are tendered for sale by the public shareholders.
Panasonic Corp share price shot up 5 per cent to hit the upper circuit filter for the day at Rs 194.3 a piece. The company’s share price has risen three-fold in the past six months alone.
If the Japanese firm sticks its offer price to the level at which it bought stake from local partners it may not be able to garner much in the delisting offer.
Founded in 1988, Panasonic Appliances India, formerly Panasonic Home Appliances India Co Ltd, is engaged in the manufacturing, and marketing of kitchen and small domestic appliances. Its products catalogue includes cookers, mixes, microwave ovens, water purifiers, etc. It also offers beauty care and health care products.
(Edited by Joby Puthuparampil Johnson)