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Business News/ Markets / Stock Markets/  Lotus Chocolate shares hit upper circuit as Reliance makes open offer to buy stake

Lotus Chocolate shares hit upper circuit as Reliance makes open offer to buy stake

Lotus Chocolate shares surged to hit upper circuit level of 5% to ₹156 apiece on the BSE


Shares of Lotus Chocolate surged to hit upper circuit level of 5% to 156 apiece on the BSE in Friday's deals as Reliance group companies Reliance Consumer Products Ltd (RCPL) and Reliance Retail Ventures Ltd (RRVL) announced an open offer to acquire a 26 per cent additional stake in Lotus Chocolate.

The firms will together acquire 33.38 lakh shares of Lotus Chocolate from the open market at a fixed price of 115.5 per share, said a notice by DAM Capital, which is managing the offer. The open offer will start on February 21 and conclude on March 6.

The offer will aggregate to a total consideration of 38.56 crore over the full acceptance, said an open offer-detailed public statement shared by the company with stock exchanges on Thursday.

The company had earlier said that RCPL, the fast-moving consumer goods arm of Reliance Retail, will acquire a 51% stake from promoters at 113 rupees a share and will also subscribe to some non-noncumulative redeemable preference shares. RCPL would also make an open offer to acquire 26% from public shareholders of Lotus.

Reliance Retail Ventures Ltd (RVNL) is the holding company of all the retail businesses under billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL). RRVL, through its subsidiaries and affiliates, operates over 16,500 stores and partners with over 2 million merchants. It also operates a network of omnichannel businesses through Jio Mart, Ajio, Netmeds, Zivame and other online channels.

As part of the share purchase agreement (SPA), RCPL proposes to acquire 77 per cent of the paid-up share capital of Lotus Chocolate through a "secondary purchase" from promoters Prakash Peraje Pai and Ananth Peraje Pai, followed by an open offer.

As per the SPA, Prakash Peraje Pai and Ananth Peraje Pai proposed to sell equity shares of the company to RCPL. Both jointly own 57% stake in Lotus Chocolate, as of the quarter ended September 2022.

Lotus Chocolate shares have surged about 21% in a year's period. Lotus Chocolate Company Limited is a manufacturer of chocolates, cocoa products and cocoa derivatives and its products include cocoa powder, cocoa mass and cocoa butter, catering to industrial and consumer demand.

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Published: 06 Jan 2023, 03:08 PM IST
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