KARACHI, Feb 7: An agreement has been made between parties for change of hands of majority equity in Dandot Cement Company Limited.

The purchaser, Three Stars Cement (Private) Limited announced that it had entered an agreement with the existing sponsors to acquire 52.1 million shares, which works out to 76.8 per cent of the 67.8 million outstanding shares in Dandot Cement, along with management control.

The purchaser is offering price of Rs34.72 for each share of the face value of Rs10 in Dandot Cement. The price looks attractive for the existing stakeholders, since the stock in the company is currently trading at just about half that value.

Pursuant to the requirement of the Listed Companies (substantial acquisition of voting shares and takeovers) Ordinance, 2002, the acquirer has made an offer to the existing shareholders to purchase from them a total of 678,400 shares (being one per cent of the voting shares) at the similar price of Rs34.72 per share.

Three Stars Cement said that the offer was valid between Feb 2 and 24, 2007.

The Bank of Punjab has been appointed as managers for the offer under clause 7(1) of the said Ordinance.

The announcement put to rest several questions that boggled the minds of stock investors.

The market price of the share in Dandot Cement, which stood at Rs14 on Jan 26, gained 25 per cent in value to climb to Rs17.50 in just five sessions until the close of trading on Feb 6, with the last three days witnessing the stock jump to its upper lock of Re1 each.

The knowledge of the ownership change could be part of the reason, but the other half must surely be the sudden bull run on cement stocks all across the sector.

Bank of Punjab would act as the manager to the offer.

Stand alone, the stock in Bank of Punjab has also witnessed a massive gain of Rs16.65 or 16 per cent over the last 10 sessions, from Rs106.95 on Jan 19 to Rs123.60 at the end of trading on Feb 6.

Shares of banking sector have also been in great demand and the BoP stock could have galvanised on that account. But a few days ago, some ‘disinformation’ was making the rounds at the market to the effect that Bank of Punjab itself was acquiring Dandot Cement Company.

In either case, it looks like those who leaped to pick up the cement company’s stock, scarcely made a bad bargain.