Phoenix lamps to be merged with Suprajit Eng.
its not a great move for minority shareholders - honestly, I was expecting that the merger would happen in a while since phoenix has just started showing improved results. Given that ajit rai is the controlling shareholder in both, the merger ratio is not exactly favourable - ideally it should have been at a higher price than CMP given the control premium that comes with the merger.
Its a great deal for suprajit shareholders and not such a great deal for phoenix share holders. I exited my position at a small profit but suffice to say this was a good lesson learnt.
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@varadharajanr Agree with you, but given that Suprajit’s results are likely to be good, do you feel there is some more upside to Phoeniex Lamps
There be an upside for sure but I had played for both PE rerating plus EPS growth. The former wont happen for sure.
Agree with you @varadharajanr - but with Suprajit looking for multiple arbitrage it was inevitable that they would want to keep the (minority) institutional investors in Suprajit happy rather than the minority largely non-institutional investors in Phoenix Lamps. Lesson learnt for the future.
********* Special situation ( this was there before as well for some time) *****
Around 10 months back or so , Suprajit Engg took over PHOENIX LAMPS .5:4 ( Phoenix/Suparjith) share swap ratio was announced as per this Merger Deal.
PHOENIX LAMPS CMP 164.50,SUPRAJIT ENGINEERING 227.85
For every 5 shares of PHOENIX you get 4 shares of SUPRAJIT share.
0.8* 227.85 = 182
Post share swap your Pheonix share will theoretically give you 182 Rs.
So you are likely to make (182-164.50 ) 17.5 Rs profit in 1 share .
Risks:
We dint know when this share swap will complete. May take 4 to 8 more months. Legal things may drag this process.
We dont know when the price of Suprajit after this share swap.
Experts views are welcome.
Thanks.
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Hello,
I had written my views on PHOENIX LAMPS on 24h March 2017, where we had a opportunity to make 17.5 Rs per 1 share of PHOENIX LAMPS with some risk.
Now equation looks better to me !! You can make around 23 Rs per 1 share of PHEONIX.
Let me know if I miss any other Risks here other than the once highlighted in my previous Post.
As on 19th May 2017 ,
SUPRAJIT ENGINEERING 256,
PHOENIX LAMPS 181
5:4 ( Phoenix/Suparjit) share swap ratio.
Post share swap only Suprajit shares will be traded.
0.8 x 256 =204.8
204.8 -181 = 23.80 ( Net profit).
Notes:
- The share swap may take some more time due to delay in the Merger process. Merger proposal is now to be dealt by NCLT. NCLT Bangalore is dealing the merger case for the first time. Suprajit Mgmt is hopeful of this happening soon!!
See Page 2 in the Press release dtd. 13 Feb by Suprajit Press release in below link.
- Below video tells how Suprajit Engg. started and grown.
Disclosure :Holding PHEONIX LAMPS @ much lower price: around 8 % of my current overall portfolio.
Hello
Suprajit Engg. has declared good result . See update in below link …
http://www.suprajit.com/sites/default/files/financials/Outcome%20of%20Board%20Meeting.pdf
Pheonix / Suprajit Merger process is getting delayed. detail’s in links blow,
http://www.suprajit.com/sites/default/files/financials/Press%20Release-May%2029%2C%202017.pdf
13th Sept 2017 is record date for Pheonix Lamp share swap with Suprajit. Finally the date is fixed for this share swap.
4 Suprajit shares of Face value Rs.1 will be issued to 5 shares of Pheonix Lamp of Face value Rs.10
http://www.moneycontrol.com/stocks/reports/phoenix-lamps-revised-record-date-8671241.html
Finally PHOENIX LAMPS stopped trading .Yesterday it was last traded @220 Rs. I am sure the Phoenix share holder will make decent money by getting Suprajit share.