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KARACHI: The Chinese state-owned Inner Mongolia Yili Industrial Group Ltd — the dairy manufacturing industry — has shown interest to acquire up to 51 per cent of voting shares and control of Fauji Foods Ltd (FFL).

In separate announcements to the stock exchange, Citibank NA Pakistan and the associated company of FFL said its total paid-up shares stand at 528.4 million. Fauji Fertiliser Bin Qasim Ltd (FFBL) holds 267.3m shares, representing 50.6pc of the issued capital of FFL, while Fauji Foundation has 67.4m shares representing 12.8pc of the equity.

According to manager to the transaction, the share price of the company on close of business on July 30 stood at Rs34.40 per share, while the weighted average price as quoted on the securities exchange during four weeks preceding the date of public announcement of intention worked out at Rs33.12.

The acquisition price per share or the total worth of transaction remained undisclosed. Following the announcement of intention of acquisition, both FFL and FFBL closed at their ‘upper circuit’ ie the maximum permitted gain of 5pc in stock price in a day.

With 6.078bn yuan in authorised and paid-up capital, the main business of the acquirer involves processing, manufacturing and sales of milk and dairy products. It has several major product lines including liquid milk, milk beverage, milk powder, frozen drinks and yoghurt.

According to the acquisition plans, the Chinese company intends to purchase up to 269.5m shares (51pc) through agreement and shares up to 67.5m (12.8pc) via a public offer.

The manger to the offer stated that the acquisition may be undertaken by the acquirer directly and/or through a special purpose company or an existing subsidiary, the details of which shall be provided to the exchange and the Securities and Exchange Commission of Pakistan upon finalisation.

Published in Dawn, August 1st, 2018