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12 September, 2014 09:09 AM Source: Financial Times - Sri Lanka
ODEL1.jpg

Fast-growing Softlogic Holdings Plc yesterday created a sensation when it acquired a strategic 44.5% stake in popular fashion retailer Odel Plc for Rs. 2.7 billion, triggering the Takeovers Code.
Odel saw 124 million of its shares changing hands via 621 trades for Rs. 2.73 billion. Softlogic Group bought 120 million shares at Rs. 22 and collected some at below. Odel hit an intra-day high of Rs. 22.20 and a low of Rs. 21.60 before closing at Rs. 22, up by 50 cents.
Odel Founder and CEO Otara Gunewardene sold 80.8 million shares for Rs. 1.78 billion, brothers Ajit sold 39 million shares and Ruchi shed one million shares. Strike price of the deal was viewed as a win-win for both parties. Net asset per share as at June 2014 was Rs. 19 at Group level and Rs. 17 at company level whilst Odel has maintained a good dividend track record too among newly-listed entities.

In what analysts maintained as a deal in the making for over two months, the acquisition boosted the overall business and market sentiment as it heralds what would be aggressive business leader Ashok Pathirage-led Softlogic Holdings’ biggest acquisition worth Rs. 6 billion if the rest of the shareholders accept the mandatory offer.
The controlling shareholder of Odel is Parkson Retail Asia Ltd., Malaysia, which holds 47.46%. It couldn’t be confirmed whether Parkson will exit too. It paid between Rs. 23.50 and Rs. 22.70 per share in originally acquiring 42% stake in July 2012 for Rs. 1.43 billion.
Financing for the acquisition had been by HNB with Softlogic Holdings Plc and Softlogic Retail Ltd., taking up 50% each of the stake bought yesterday.

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