January 7, 2006	Saturday	Zilhaj 6, 1426

KARACHI, Jan 6: Japan Power Generation Limited -— a stock market listed company -— is a target of acquisition of its majority shareholding.

In a notice published on Friday, the acquirers — Pak Oman Investment Company Limited, National Logistic Cell, Saudi Pak Industrial and Agricultural Investment Company (Pvt) Limited and Mr Nadeem Babar, Karachi — made a public offer to acquire 21.5 million shares in Japan Power Generation Limited. That would represent 16.16 per cent of the total issued shares of the company and the offer has been made at a price of Rs3.98 per share.

The notice issued by Japan Power stated that the offer was being made under the listed companies (substantial acquisition of voting shares and takeovers) Ordinance, 2002. The shareholders whose names appear in share register of the company as of January 6 would be eligible to receive the offer letter and the period for the offer has been fixed from January 6 to and inclusive of January 26, 2006.

The offer clarified that one million shares, representing 0.75 per cent of the total issued shares of Japan Power, were already held by Pak Oman Investment Company Limited. Besides, the acquirers had entered into a share purchase agreement (SPA) with around 25 parties/persons who together hold 45.4 million shares, which work out to 34.09 per cent of the aggregate equity of the ‘target company’. The SPA provided for acquisition of those share also at Rs3.98 per share. The acquirers were also said to have agreed to purchase certain loans owed by the ‘target company’ to certain of the SPA sellers.

Adding together the 0.75 per cent shares already held by the acquirers, approximately 34.09 per cent to be secured from SPA sellers and the 16.16 per cent offer made to the shareholders, the new owners would get to secure a majority stakeof 51 per cent in the ‘target company’.

Japan Power Generation was listed on the stock exchange in 1996. The company has not much of an impressive record to display with numerous years of nil dividends. But the stock in the company has remained a speculative play.

The 10-rupee share in Japan Power currently trades at slightly over Rs7 per share. It is difficult to see why a small shareholder would opt to return the shares at a price which is at 43 per cent discount to the market value?