KARACHI: Packages Limited has expressed a desire to purchase the Mitsubishi Corporation shareholding — 19.33 per cent — in Tri-Pack Films Limited, a publically listed company, at a price of Rs154.62, the company apprised the Pakistan Stock Exchange (PSX) in a letter.
The subject of the said letter was a desire to purchase 19.33% shareholding in Tri-Pack Films Limited (Tri-Pack) from Mitsubishi Corporation in the exercise of first right of refusal under the JV agreement”.
Tri-Pack is principally engaged in the manufacturing and sale of Biaxially Oriented Polypropylene (BOPP) film and Cast Polypropylene (CPP) film. Meanwhile, Packages Limited — a multinational based in Lahore — reportedly holds 33.33 per cent stake in Tri-Pack already. It is known for Rose Petal, a tissue brand.
Packages said: “In accordance with Sections 96 and 131 of the Securities Act, 2015 and Regulation 5.6.1(a) of the Pakistan Stock Exchange Rule Book, this is in continuation of our earlier letter…dated February 12, 2021 regarding Company’s expression of desire to purchase the Mitsubishi Corporation (Mitsubishi) shareholding of 19.33% in Tri-Pack Films Limited (Tri-pack) subject to price negotiation and fulfilment of all applicable corporate and legal conditions and approvals.”
It further said that the purchase price between the company and Mitsubishi was also finalised and attached with the letter, asking the PSX to inform its members accordingly.
Alpha Beta Core CEO Khurram Schezad termed this a favourable development for both companies. “Increasing shareholding seems timely strategic move by Packages,” the head of the research company said, adding: “Looking at the potential growth of the business and the market shareholding is likely to prove favorable for both companies.”
“It is a classic example of corporate acquisition through shareholding — ‘corporate raider’,” a researcher commented on the condition of anonymity. “It is a growth move by management of Packages Limited — similar to Adamjee insurance and others, where the group with stronger capital base acquires a larger number of shareholding in the company to claim the management control.”
A corporate raider is an investor who buys a large number of shares in a corporation whose assets appear to be undervalued. The large share purchase would result in significant voting rights, which could then be used to push changes in the company’s leadership and management.
Last week, the MSCI Global Small Cap Index removed Packages Limited (PKGS) from the index added TRG Pakistan to it.