KARACHI: Wyeth Pakistan Ltd, a listed company on the pharmaceutical sector, informed the Pakistan Stock Exchange on Tuesday that the parent company, Wyeth LLC, USA resolved to consider purchase of shares from all minority security holders in order to increase its ownership and de-list the company.

Wyeth LLC, USA currently holds 40.55 per cent shareholding in Wyeth Pakistan.

The company observed that the shares held by Wyeth Holdings LLC, previously Wyeth Holdings Corporation, USA being an affiliate of Wyeth LLC would continue to hold securities and shares in the de-listed entity. The company made the disclosure of the price sensitive information under rule 5.13 of Voluntary Delisting Rules of the PSX.

Wyeth Pakistan did not, however disclose at what price per share did the majority stockholder intended to buy out the minority investors’ stake.

At the trading on Tuesday, the Wyeth share jumped by Rs89.59 to close at Rs1,284.18. The share hit its upper circuit as excited investors dashed to mop up the minor floating stock.

Wyeth Pakistan is among the seven highest-priced scrips listed on the PSX: the other six being Unilever Pakistan Foods trading at Rs15,880, Rafhan Maize Products Company Ltd Rs9,640, Nestle Pakistan Rs5,600, Colgate-Palmolive (Pakistan) Ltd Rs2,800 and Mari Petroleum tagged at Rs1,579.

The investors’ enthusiasm for the Wyeth Pakistan stock following announcement of its buyback was fuelled by the belief that the repurchase price would be set at a handsome premium over the market value. Although there have been a number of majority stakeholders acquiring stock held by minority shareholdings with subsequent delistings in the past, a parallel could be drawn with the April 2013 buyback of minority shareholding in Unilever Pakistan by the parent Unilever Overseas Holding Ltd.

The fast-moving consumer giant was trading at the time at Rs11,000, labelled as the most expensive share on the PSX. The Unilever Overseas Holding Ltd had offered to mop up the minority equity at a price of Rs9,700 a share. It has to be conceded that like many other buyback transactions, the exchange brokered a good deal for the small shareholders.

After several rounds of persuasions and discussions, Unilever agreed to pay Rs15,000 for each share — 55pc higher than the offered price. The company was delisted after it paid Rs50bn to the minority shareholders for their stake in the company, making it the biggest share repurchase transaction in the corporate history of Pakistan.

Published in Dawn, May 19th, 2021