De-listing proposal by Nestle Lanka

Wednesday, 10 May 2023 00:05 - - {{hitsCtrl.values.hits}}

I would like to address a misunderstanding that seems to be prevalent among both the media and those in charge of the stock exchange regarding the delisting process and its legal implications.

To clarify, Nestle is currently a listed entity, and the board has recommended to the shareholders that they can delist with a purchase offer by the parent company. However, it is important to note that this motion can still be rejected by the shareholders. Recent delistings of both AIA and BOC Property Development Ltd. (PDL) were rejected by shareholders in multiple rounds.

In the case of the BOC delisting, the process was carried out covertly by scheduling a meeting during a fuel shortage amidst a COVID-19 outbreak. As it stands, Nestle is likely to face significant pushback as both the delisting price and timing are highly opportune to the parent company.

Interest rates are sky-high, driving down valuations, while monetary policy is tight, reducing liquidity in the market. Additionally, significant price increases across all Nestle products make it difficult for those without inside knowledge to gauge future profitability.

As a shareholder with a significant ownership stake in Nestle, I believe my ownership exceeds the basic fair value that the Securities and Exchange Commission, the company, and the independent advisors ascribe to it. I take pride in knowing that my many purchases of Nestle products contribute to my own value as a shareholder. I also value having a say in how the company is being run by voting in the AGM.

It is currently 8 May, and as of this morning, I have not received the circular or delisting notice of the extraordinary general meeting by mail. This documentation has conveniently not been uploaded to the internet. I, like any sane person, intend to reject the offer and call for the company to remain listed. The trading of the share should commence forthwith and though I have limited means I am willing to buy what I am capable of at prices far exceeding those in the initial offer.

D. Perera