PS Saminathan, chairman and managing director, Pyramid Saimira Group, has decided to buy out two co-promoters in Pyramid Saimira Theatre Ltd (PSTL), India’s largest theatre chain company. Saminathan is expected to fork out more than Rs 140 crore to buy out both the co-promoters. The move is part of his strategy to ward off any hostile take-over for the theatre chain in the future.
In a communication to the stock exchanges on Monday, Saminathan said that he will be acquiring 70,45,619 equity shares from N C Ravichandran and Nirmal Kotecha, co-promoters and main investors of the company. Together they hold 24.91% stake in the company.
With this proposed acquisition, Saminathan’s personal (excluding his wife’s and persons acting in concert (PACs) holdings) holding in PSTL will move upto 46.89% or 1,32,58,575 shares of the total paid-up capital. The proposed acquisition value per share is Rs 200. The date of proposed acquisition is from October 15, 2008 and will end on November 28, 2008.
When contacted Saminathan said: “Given the company’s growth and its future plans, the share price is currently undervalued and accordingly I have decided to consolidate my holding in the company. Both the co-promoters are Mumbai-based investors and have been associated with the company for the past 30 months or so. By selling their stakes to me, they expect to gain 10-times more than what they originally invested at Rs 20 a share.”
He said: “I am planning to buy the co-promoters’ shares using my personal wealth.” The company hopes to post better results in the quarters to come, he added.