NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b

Teller · 1 NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Thu Mar 19, 2015 6:35 pm

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National Development Bank has purchased 8.5% stake in Seylan Bank for Rs. 1.6 billion which many believe was strategic.
NDB said it acquired 14.9 million voting shares on Tuesday. With the purchase NDB stake in Seylan has increased to 9.53%. On Tuesday around 15 million Seylan Bank shares changed hands including 11.7 million shares via crossing at Rs. 106 each.
NDB…
Sellers included a range of individuals and institutions who had been wanting to exit for sometime but couldn’t due to the absence of a serious buyer.

Gamunu · 2 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Thu Mar 19, 2015 8:12 pm

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sorry bit of a huge noob question , sey bank is trading at 100.2 so ndb buys at 106 crossing that is a ~ 6 rupee premium, since it is a same sector entity it is most likely a strategic move, rather than an investment, if so could someone extrapolate on some of the "general" strategies available to NDB, if the buy was not strategic did NDB think this was a fair bargain, should we be looking at NDB and SEYBANK

raider · 3 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Thu Mar 19, 2015 11:55 pm

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The premium of Rs. 6/- was somewhat of a premium for control (although it is not exactly so since maximum shareholding in a bank is limited to 15% except in certain special circumstances). I believe NDB would gain board representation at the forthcoming AGM.

Currently I see this as an investment made by NDB. However, this is subject to change where NDB proceeds with a further acquisition. This is also quite likely since Browns, LOLC and other Ishara Nanayakkara related party are required to reduce their stake in the bank over time.

If this is just another investment, then they will probably sell this stake to a foreign investor later on, given their strong relationships with such parties, making a good gain for themselves.

Teller · 4 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Fri Mar 20, 2015 12:14 am

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As per NDB justification,Who wants to exit from seylan bank?, i feel its not a wise decision on exit @ 106. the bank is performing very well and highly under value counter in banking sector. They had 3 billion plus profit for financial year 2014 too. We can say NDB is a real winner.

raider · 5 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Fri Mar 20, 2015 9:01 am

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Who wants to? But they HAD to.

It is undervalued indeed! Plus, there is a Rs. 2.50 dividend attached to that Rs. 106 stock also.

dinesh.lakshan58 · 6 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Sat Mar 21, 2015 8:50 pm

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Gamunu wrote:sorry bit of a huge noob question , sey bank is trading at 100.2 so ndb buys at 106 crossing that is a ~ 6 rupee premium, since it is a same sector entity it is most likely a strategic move, rather than an investment, if so could someone extrapolate on some of the "general" strategies available to NDB, if the buy was not strategic did NDB think this was a fair bargain, should we be looking at NDB and SEYBANK

dinesh.lakshan58 · 7 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Sat Mar 21, 2015 8:52 pm

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I give many

rainmaker · 8 Re: NDB buys 8.5% stake in Seylan Bank for Rs. 1.6 b Sun Mar 22, 2015 9:01 am

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the issue with seybank is that their loan book is just a bunch of business related overdrafts. I haven't kept in touch with this counter so im not sure if the hyatt investment is still on the books at face value.

the credit card portfolio within this bank is also very small.