Spence Hotel triggers Takeovers Code on Browns Beach

Aitken Spence Hotel Holdings has triggered the SEC Takeovers and Mergers Code on Browns Beach Hotels Plc after it took up the shortfall of shares under the latter’s rights issue.

Prior to the Rights issue, Spence Hotel Holdings held 28.7% stake (amounting to 2.75 million shares) and the Company said it had acquired 33.2% or 14.34 million shares consequent to taking up the shortfall of the shares of the Rights.                                   

Aimed at raising Rs. 2.18 billion, the Rights Issue was on the basis of 7 for 2 at Rs. 65 each and 33.6 million shares were listed on 25 February. The company is building a luxury resort demolishing the old hotel in Negombo. Post rights the share will be sub divided into three shares for every one held.

As per the Company Takeovers and Mergers Code 1995 as amended, Spence Hotel Holdings will make an offer to the other shareholders of Browns Beach Hotels PLC to purchase their shares after the share split of one share into three shares at a price of Rs. 21.70 per share.

Browns Beach share yesterday traded between a high of Rs. 69 and a low of Rs. 63 before closing at Rs. 66, down by Rs. 1.30.

As at December 31, 2010, Stassen Exports held 44.2% stake in Browns Beach whilst Distilleries held 3.43% and Milford Exports owned 2.6%. Several related parties also held stakes in Browns Beach.