Central Finance (CFIN) - Takeover Target?

CHRONICLE™ · 1 Central Finance (CFIN) - Takeover Target? Thu May 12, 2011 11:03 pm

CHRONICLE™

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Careful analysis of the shareholdings of Central Finance Company (CFIN) indicate the potential of a hostile takeover. Currently the majority of CFIN is secured by the current shareholders not through absolute ownership but with the support of a trust which is vested under the control of the board of directors. Recomposition of the board of directors together with the purchase of a sizable quantum of minority shareholdings could spark a potential takeover of the CFIN by potential acquirer.

According to market news this hypothetical scenario is being pursued by a group of investors who had already acquired a substantial shareholdings in CFIN.

Latest quarterly accounts of CFIN is given below.
http://www.cse.lk/cmt/upload_report_file/366_1297247911038.pdf

Quibit · 2 Re: Central Finance (CFIN) - Takeover Target? Fri May 13, 2011 12:05 am

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Corporate Services (pvt) ltd which owns 23.29% of central finance is the single largest shareholder. This is a employee share trust and under the independent management of corporate services (pvt) ltd which is an associate of FG De Saram the attorneys at law. Page 34 of 2010 annual report.

CHRONICLE™ · 3 Re: Central Finance (CFIN) - Takeover Target? Fri May 13, 2011 12:12 am

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Tuesday, March 22, 2011
Perpetual Capital buys 9% of Central Finance for Rs. 1.5 b

Sri Lanka Insurance Corp exits with a hefty capital gain

Bullish on the post-war boom in financial services sector, the new kid in the market Perpetual Capital yesterday bought a 9% stake in Central Finance Plc for Rs. 1.5 billion whilst the seller Sri Lanka Insurance Corporation exiting with a hefty profit.

Slightly over 1.8 million shares of Central Finance (CF) traded for Rs. 1.516 billion yesterday between a high of Rs. 985 and a low of Rs. 790 before closing at Rs. 928.90, up by Rs. 125 or 15.5%. Of that the biggest block of 1.6 million shares transacted at Rs. 800 each.

Last week CF closed at Rs. 869.30, down by Rs. 29.50 whilst its 52-week highest is Rs. 1,050.

Perpetual Capital promoted by young kid on the block Arjun Aloysius picked up all available quantity of CF bringing the stake to around 9.3%.

Seller was SLIC which as at 31 December, 2010 held 1.67 million shares in CF, down from 12% a year earlier.

Analysts speculated that SLIC’s cost of CF holding was around Rs. 100 per share suggesting the insurance giant would have booked around Rs. 1 billion as capital gains.

CF is controlled by the Wijenaike family with a collective stake of around 40%. The Net Asset Per share of CF is Rs. 435 up from Rs. 389 in March 2010 and Rs. 373 in December 2009.

The decision to invest in CF by Perpetual Capital is on strong upside for the financial services sector in post-war Sri Lanka. Its other exposure in financial services sector is a 15% stake in HDFC Bank in addition to 3% stake in Seylan Bank and around 2% stake in LOLC.

In the first nine months of 2010/11 financial the net profit attributable to equity holders of CF grew by 69% to Rs. 1.2 billion whilst profit before VAT and tax was Rs. 2.4 billion, up by 78% in the first nine months of 2009/10 financial year. CF Group turnover grew by 7% to Rs. 6.06 billion.

Perpetual Capital has been among the most bullish on post-war Sri Lanka as far as investing in the stock market. As part of its growing portfolio is over 10% stake in Ceylon Grain Elevators, 12% in Bairaha Farms, over 12% stake in Ashok Leyland and nearly 2% stake in DIMO.

source - www.ft.lk

MarketSIRA · 4 Re: Central Finance (CFIN) - Takeover Target? Fri May 13, 2011 11:16 am

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[quote="Avinash"]Tuesday, March 22, 2011
Perpetual Capital buys 9% of Central Finance for Rs. 1.5 b

Sri Lanka Insurance Corp exits with a hefty capital gain

Bullish on the post-war boom in financial services sector, the new kid in the market Perpetual Capital yesterday bought a 9% stake in Central Finance Plc for Rs. 1.5 billion whilst the seller Sri Lanka Insurance Corporation exiting with a hefty profit.

Does that mean Perpetual is buying Central Finance?

Anybody have an idea?