Harry triggers Takeover Code on Aitken Spence

Senior business leader Harry Jayawardena-controlled Distilleries Company (DCSL) has triggered the Takeovers and Mergers Code on Aitken Spence Plc, the Daily FT learns.

The triggering had taken place late last week when Melstacorp, a subsidiary of DCSL, had bought 62,100 Spence shares at Rs. 110 each.

Spence’s number of shares in issue is 406 million and 30% amounts to 121.8 million shares. As at 30 September 2011, Distilleries held a stake of 28.01% or 113.7 million shares.

Two related parties, Milford Exports held 1.06% and Stassen Exports had 0.8%.

Their collective stake was 29.87%, whilst it is learnt Melstacorp would have picked up more quantities since September quarter.

Analysts viewed Harry J’s move as timely given the relatively low price at which Spence has been trading as in the case of several other blue chips in a highly-depressed market.

Spence’s 52-week highest price is Rs. 200.10, and current price is almost half and the purchase price last week is only Rs. 10 from its 52-week lowest. Net asset per share of Spence is Rs. 22.76.

Last week Spence saw 599,300 of its shares traded between a high of Rs. 113.50 and a low of Rs. 110 before closing at Rs. 111.60, up by 50 cents. When the market opened yesterday after Christmas holidays, Spence share shot up by Rs. 3.40 to close at Rs. 115 whilst it hit an intra-day high of Rs. 115.90 with 8,200 shares traded.

Despite triggering the code, which is yet to be officially announced, analysts don’t think many other shareholders would accept the offer. Foreign holding in Spence inclusive of Rubicond, which owns 16.25%, is around 37.4%. Among major local institutional shareholders are EPF (7.35%) and SLIC (10%). Individual shareholders were holding a 10.6% stake in Spence as at 31 March 2011.

In the first half of the 2011/12 financial year, Spence posted a pre-tax profit of Rs. 1.7 billion, an increase of 7.5% from the corresponding period last year.

Group revenue rose by 8% to Rs. 13 billion whilst profit attributable to shareholders increased by 8.4% to Rs. 1.1 billion, while earnings per share rose by 8.4% to Rs. 2.79 over the corresponding period in the previous year.