Macmillan demerger plan miffs minority shareholders
Macmillan India’s plan to demerge its book publishing business into Macmillan Publishers India (MPIL) has irked the minority shareholders.
By Payaswini Upadhyay, ET Bureau |
MUMBAI : Macmillan India���s plan to demerge its book publishing business into Macmillan Publishers India (MPIL) has irked the minority shareholders. The aggrieved shareholders, including institutional investors, have decided to raise their concern at their meeting with the company on August 2.
The company has conveyed the meeting with the equity shareholders to discuss the merger issue on the direction of the Madras High Court.
According to a retail shareholder, the main cause for concern is the company���s proposal that the demerged entity, MPIL, will not be listed with the stock exchanges. The merger plan envisages that the shareholding of MPIL will be the mirror image of Macmillan. It means, the existing shareholders will get one share of MPIL for every share they held in Macmillan.
If the shareholders do not want to get shares of the unlisted MPIL, they may encash their holding by selling MPIL shares at Rs 69 apiece. The valuation is done by PricewaterhouseCoopers, Macmillan said.
���It is unfair that the company is depriving the investors of the listing benefits. However, we will raise our voice at the August 2 meeting. Also, Macmillan recently acquired Frank Brothers & Company. Frank Bros valuation for 100% of shares was around Rs 45 crore, with revenue of over Rs 36 crore and PAT of Rs 1-2 crore.
The valuation bench mark is significantly higher than what PriceWaterhouse used to value Macmillan���s publishing business,��� said an investor. When contacted, a Macmillan official said: ���We have a meeting with the shareholders on Saturday. We have nothing more to say on this.���
According to another investor, the company should issue the shares of MPIL to the retail shareholders to begin with and then it should list MPIL on the stock exchanges. Later, if required, they should go for delisting as prescribed by Sebi.
���The company has been valued by PricewaterhouseCoopers at the book value of around Rs 110-115 crore. But the actual valuation would be substantially higher.
The company has conveyed the meeting with the equity shareholders to discuss the merger issue on the direction of the Madras High Court.
According to a retail shareholder, the main cause for concern is the company���s proposal that the demerged entity, MPIL, will not be listed with the stock exchanges. The merger plan envisages that the shareholding of MPIL will be the mirror image of Macmillan. It means, the existing shareholders will get one share of MPIL for every share they held in Macmillan.
If the shareholders do not want to get shares of the unlisted MPIL, they may encash their holding by selling MPIL shares at Rs 69 apiece. The valuation is done by PricewaterhouseCoopers, Macmillan said.
���It is unfair that the company is depriving the investors of the listing benefits. However, we will raise our voice at the August 2 meeting. Also, Macmillan recently acquired Frank Brothers & Company. Frank Bros valuation for 100% of shares was around Rs 45 crore, with revenue of over Rs 36 crore and PAT of Rs 1-2 crore.
The valuation bench mark is significantly higher than what PriceWaterhouse used to value Macmillan���s publishing business,��� said an investor. When contacted, a Macmillan official said: ���We have a meeting with the shareholders on Saturday. We have nothing more to say on this.���
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According to another investor, the company should issue the shares of MPIL to the retail shareholders to begin with and then it should list MPIL on the stock exchanges. Later, if required, they should go for delisting as prescribed by Sebi.
���The company has been valued by PricewaterhouseCoopers at the book value of around Rs 110-115 crore. But the actual valuation would be substantially higher.
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