The Delisting offer in all likelihood will not go through, with the counter offer of Rs. 400 being below the price that would enthuse shareholders. The mgt. on its part cannot be blamed as the share price over the last many years has hardly seen 400 levels, & barring the last month or so, anyone who bought the share would be sitting on a profit. The problem comes when we start treating de-listing as an arbitrage opportunity & spoil the party!
On the basis of financials alone, the stock is likely to settle lower & perhaps the shareholders would be better off exiting at current market levels of about 400. The problem however is that the shares lodged for de-listing have to be first received back.
Shareholders should also note that the delisting rules are somewhat unfair. If shares are not withdrawn buy the shareholders, it is assumed that they accept the counter offer of Rs. 400! So much for shareholder protection!!!
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