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M a i n t a i n v i e w : S e l l a t c u r r e n t m a r k e t p r i c e …
In April 2011, AAA United BV (AAA United), along with Aktieselskabet and
Ashwell Holding Co Pvt Ltd, had made an open offer to the shareholders
of Bombay Rayon Fashions Ltd (BRFL) to acquire up to 2.84 crore shares
amounting to 20% of the emerging voting capital of the company at a
price of | 300/share. The offer was meant to open on May 30, 2011.
However, the same was deferred. The company has now announced
revised dates for the same (refer Exhibit 1). Further, Sebi has directed that
interest at the rate of 10% per annum be paid on the offer price for the
delay period from the scheduled date of payment to the shareholders of
BRFL. Accordingly, the offer price stands revised from | 300 to | 302.06
per equity share. Based on the offer price, the size of the open offer works
out to | 857.8 crore. The offer is not conditional upon any minimum
acceptance ratio.
Exhibit 1: Offer details
Original Schedule Revised Schedule
Offer opening date 30-May-11 4-Nov-11
Offer closing date 18-Jun-11 23-Nov-11
Source: Company, ICICIdirect.com Research
V i e w
We continue to maintain our view that the existing investors should sell
the shares at the CMP. Considering a higher tax rate (to be paid in case of
tendering shares in the open offer, as in an off-market transaction short
term capital gain from shares is taxed at normal slab rates) and a waiting
period (as the open offer closes on November 23, 2011), we believe an
investor should sell the shares at the CMP as the returns for a longer
waiting period are not substantially higher.
Note: * - EPS for FY12E and FY13E and the target price has marginally
reduced due to increase in equity due to conversion of warrants.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
M a i n t a i n v i e w : S e l l a t c u r r e n t m a r k e t p r i c e …
In April 2011, AAA United BV (AAA United), along with Aktieselskabet and
Ashwell Holding Co Pvt Ltd, had made an open offer to the shareholders
of Bombay Rayon Fashions Ltd (BRFL) to acquire up to 2.84 crore shares
amounting to 20% of the emerging voting capital of the company at a
price of | 300/share. The offer was meant to open on May 30, 2011.
However, the same was deferred. The company has now announced
revised dates for the same (refer Exhibit 1). Further, Sebi has directed that
interest at the rate of 10% per annum be paid on the offer price for the
delay period from the scheduled date of payment to the shareholders of
BRFL. Accordingly, the offer price stands revised from | 300 to | 302.06
per equity share. Based on the offer price, the size of the open offer works
out to | 857.8 crore. The offer is not conditional upon any minimum
acceptance ratio.
Exhibit 1: Offer details
Original Schedule Revised Schedule
Offer opening date 30-May-11 4-Nov-11
Offer closing date 18-Jun-11 23-Nov-11
Source: Company, ICICIdirect.com Research
V i e w
We continue to maintain our view that the existing investors should sell
the shares at the CMP. Considering a higher tax rate (to be paid in case of
tendering shares in the open offer, as in an off-market transaction short
term capital gain from shares is taxed at normal slab rates) and a waiting
period (as the open offer closes on November 23, 2011), we believe an
investor should sell the shares at the CMP as the returns for a longer
waiting period are not substantially higher.
Note: * - EPS for FY12E and FY13E and the target price has marginally
reduced due to increase in equity due to conversion of warrants.
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