KARACHI, Jan 4: The Dalda Foods (Pvt) Limited has acquired majority stake in the Wazir Ali Industries at a price of Rs25 per share, and on Friday the acquirer made through the stock exchange, the mandatory offer for purchase of 10 per cent equity from the public at the same price.
Four years (March 30, 2004) since buyout of ‘Dalda business’, which included the brand edible oil and ghee “Dalda” from Unilever Pakistan, Dalda Foods Ltd—an unlisted private company-- has added “Tullo” banaspati to its portfolio of products.
“Tullo” had been the mainstay of Wazir Ali Industries, founded and controlled by Syed Wajid Ali Shah and family since as far back as 1953.
Having acquired ‘Tullo’, the company seems to have eliminated one of its main competitors in the edible oil segment.
The Competition Commission may be giving a hard look at the deal, but with several other big names in the field, the company does not hold an absolute monopoly at least until now in the branded ghee segment.
It may be instructive to recall that for decades, ‘Dalda’ has been a household name in the sub-continent. Its business grew more rapidly after Lever Brothers, London, affiliated with old time industrialist Kassim Dada’s brand of ghee called ‘Dada’.
Lever took stake in Kassim Dada’s flourishing business at the time. In his autobiography, Kassim Dada mentions that the one thing that the foreign partner asked was to add Lever’s first letter “L” in between “Dada”, which on his acquiescence became ‘Dalda’.
But past is another country.
The edible oil businesses were now facing fierce battle with the combined pressure from smuggled, unbranded and competitive local ghee and cooking oil brands.
For the shareholders in Wazir Ali Industries, the offer at Rs25 per share, seems at least Rs3 lower than the last stock exchange quoted price of Rs28 ; the company had disbursed bonus shares at five per cent in 2007 after several years of nil dividend.
Details of the deal provided to the stock exchange by the company revealed that the acquisition of Wazir Ali Industries by Dalda Foods (Pvt) Ltd was made under the Listed Companies (Substantial Acquisition of Voting shares and Takeovers) Ordinance, 2002. Under the share purchase agreement dated Dec 17, 2007, (the “SPA Sellers”) of Wazir Ali Industries Limited (the “Target Company”) had sold 3.668 million shares, representing 45.93 per cent of the total issued stock of the Target Company at offer price of Rs25 per share.
After divesting the majority equity, the holding of “SPA” sellers’ in the company would diminish to 0.785 million shares, representing 9.8 per cent of the total issued share capital.
On Friday, the acquirers made an offer through the stock exchanges, to purchase 0.799 million shares, representing 10 per cent of the total issued capital of Wazir Ali Industires, from the public. The offer is valid for 21 days until Jan 23.