Mega Conglomerate to acquire 15.8 percent stake of Dawood Hercules in Hubco

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LAHORE: In another big acquisition news, Mega Conglomerate (Pvt) Ltd is set to acquire 15.8 percent stake that Dawood Hercules Corporation Limited (DHCL) holds in Hubco Power Company Limited at a purchase price of Rs106.5 per share.

The sale consideration of this acquisition for Mega Conglomerate works out to Rs21.3 billion and is a loss from the previous Rs22.09 billion deal DHCL reached with Kapco which got terminated in early-November.

This development comes amidst news that Mega Conglomerate had purchased a majority 87.5 percent stake in Dewan Cement on Wednesday and it seems the company is intent on diversifying its investment portfolio.

The bourse notification filed by DHCL read “the Board of Directors of the Company, at its emergent meeting held on 1st February 2018 have accepted an offer received from Mega Conglomerate (Private) Limited pursuant to which it has agreed to purchase the entire shareholding of the Company in The HUB Power Company Limited (“HUBCO”) at a purchase price of PKR 106.50/- per share.”

Approval of this acquisition remains “subject to the procurement of all the applicable regulatory and corporate approvals as may be required” the notification stated.

Hubco’s Annual Report 2017 revealed Cyan Limited owned 10 million shares in Hubco as of June 30, 2017. And DHC held 172.58 million shares in Hubco.

Ths excludes DHCL’s associated companies and subsidiaries’ holdings in Hubco, which were originally offered for acquisition to Kapco.

In November 2017, Kot Addu Power Company (KAPCO) disclosed it had postponed plans to acquire 17.37pc stake in Hub Power Company Limited (HUBCO) offered for sale by Dawood Hercules Corporation Limited (DHCL).

Profit reported in end of October about Dawood Hercules Corporation divesting 17.37pc of its stake in Hub Power Company to Kot Addu Power Company (KAPCO) for Rs22.09b.

Water and Power Development Authority (WAPDA), which holds 40pc majority shareholding in KAPCO, had directed the company to shelve plans of proceeding with this proposed transaction and under its articles of association it would require a special resolution to go-ahead with this deal.

Mega & Forbes group (MFG), is a diversified business conglomerate which has undergone rapid advancement since its inception. Currently, MGF has a strong presence in shipping, logistics, terminal operations, port services, transportation, telecommunications, trading, real estate development, power, FMCG, software development and manufacturing industries.

HUBCO got incorporated as a publicly listed company in 1991 and owns a 1,200MW oil-fired power plant in Balochistan and a 214MW one in Narowal, Punjab.

Hubco shares were trading at Rs99.49, up Rs0.71, DHCL shares were trading at Rs128.18, up Rs6.10 and KSE-100 index was trading 44,221.97 points, up 172.92 points from close on Wednesday.