Promoters of Prime Focus and Reliance MediaWorks (RMW) have successfully acquired roughly 60-70% of the 7.77 crore shares targetted in the mandatory offer of Prime Focus following the merger of global films and entertainment services business of both entities, sources familiar with the matter told FE on conditions of anonymity.
Based on the calculations, shareholders tendered about 4.66-5.4 crore shares in the offer in which the promoters were looking to acquire 26% from public shareholders as part of the Sebi’s takeover regulations that requires a company to compulsorily buy shares through a mandatory open offer.
Sources said that Rakesh Jhunjhunwala is believed to have tendered shares in the offer however Jhunjhunwala’s off-market transactions could be independently verified. According to stock exchange data, Jhunjhunwala through his investment firm Rare Enterprises held 3.1% stake in the company.
RMW, together with Monsoon Studio which is owned by Namit Malhotra and Naresh Malhotra, is estimated to have spent R242-282 crore in the offer. The offer included acquisition of 7.77 crore shares at R52 per share, valuing the deal at R404.08 crore.
After the offer, promoter holding in Prime Focus will rise to nearly 80%. The company now has 12 months cooling period after which it will have to bring its promoter holding to 75% as per Sebi’s minimum public shareholding (MPS) regulations.
Centrum Capital, the investment banking arm of diversified financial services firm Centrum, was the sole manager to the open offer.
RMW and Prime Focus announced amalgamation of their global film & media services business in July 2014. As part of the deal, RMW and Prime Focus’ promoters, Naresh and Namit Malhotra, infused R120 crore fresh equity at R52 per share through a preferential allotment.
Post the preferential allotment, promoter holding rose to 63.7% (Prime Focus – 33.5% and RMW – 30.2%). The current transaction with Prime is Reliance Capital’s second alliance with the former after it exited the company following its public offer in 2006.
Interestingly, Reliance MediaWorks was delisted from stock exchanges in 2014 after receiving the necessary board and shareholders approval.
Shares of Prime Focus ended at R49.30, down 0.5% from the previous close. The stock has touched a high and low of R58.35 and R25.40, respectively, in the last 52 weeks.