Shares of Lotus Chocolate climbed 5 per cent in Friday’s trade after Reliance Consumer Products, the wholly-owned subsidiary of Reliance Retail Ventures, entered into an agreement with the promoters of Lotus Chocolate for a majority stake.
Following this, Reliance Consumer announced a mandatory open offer for acquisition of an additional up to 33,38,673 shares, representing 26 per cent of the emerging voting capital of Lotus Chocolate Company from the public shareholders. The offer is made at a price of Rs 115.50 per share.
On Friday, the stock hit its 5 per cent upper circuit limit at Rs 122.95 on BSE.
As part of the share purchase agreement, Reliance Consumer Products would 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.
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Reliance Consumer Products will acquire 65,48,935 equity shares of Lotus, representing 51 per cent of the paid-up equity share capital from the current promoter and promoter group at Rs 113, aggregating Rs 74 crore. Reliance Consumer Products said the company and certain promoter group entities of Lotus will subscribe to 5,07,93,200 non-cumulative redeemable preference shares of face value of Rs. 10 each at par.
RRVL Executive Director Isha Ambani said, “The investment in LOTUS underlines our commitment to further boost indigenously developed daily use high quality products, to serve a broad customer spectrum at affordable prices. We look forward to working with the highly experienced management team of LOTUS as we further expand the business and drive its next growth phase.”
The capital infused by Reliance Consumer is seen helping the company drive growth and expand into a
comprehensive confectionery, cocoa, chocolate derivatives and related products manufacturer.