DFM Foods stock slumps on open offer announcement

US-based private equity firm Advent International Corporation has made an open offer to acquire 26 per cent share of DFM Foods for an offer price of Rs. 249.50 per equity share. Reacting to this, the stock of DFM Foods fell by almost 8 per cent on BSE.

The open offer is for up to 13,070,429 fully paid-up equity shares with a face value of Rs. 2 each of DFM Foods Limited which is the target company from public shareholders of the company by AI Global Investments (Cyprus) PCC Ltd in compliance with SEBI regulations. Post this, Advent International will acquire 67.90 per cent stake in the company through its step-down subsidiary AI Global Investments (Cyprus) PCC Ltd. for a total consideration of Rs. 851.66 crore.

The filling to exchanges showed that the US investment firm entered into a share purchase agreement with promoters Mohit Jain and Rohan Jain to acquire around 38 per cent stake. It shall buy 2,500,000 equity shares having 4.99 per cent of the share capital from Manmohan Singh and Anuradha Sharma. Whereas AI Corp signed a purchase pact with WestBridge Crossover Fund, LLC, Aravali Investment Holdings and Jwalamukhi Investment Holdings to acquire 12,460,585 shares which cumulates to 24.87 per cent of the paid up share capital and 24.79 per cent of the expanded voting share capital.

DFM Foods is involved in manufacturing, marketing and selling snack foods.

On Wednesday, the stock of DFM Foods closed at Rs. 249.7 per share, down by 7.59 per cent or Rs. 20.5 per share. The 52-week high is Rs. 299 and 52-week low is Rs. 176.55 on BSE.