Need to do an analysis of this one over the weekend but did a quick check of timeline for Jyothy-Henkel and TechM-Satyam ( similar situations)
Timeline
Jyothy-Henkel
1. Board meeting of Jyothy Lab for considering amalgamation 15th June 2012
2. Direction by Bombay High Court to convene meeting of
Shareholders 19th October 2012
3. Court Convened Meeting(s) held 22nd November 2012
4. Bombay H.C. approval for amalgamation 12th April 2013
5. Effective date of amalgamation ( info to BSE) 13th May 2013
6. Record date for determining eligibility for allotment
of shares 28th May 2013
Shares were actually allotted sometime in August due to the fact that NSDL/CDSL wanted clearance from SEBI since SEBI had put Henkel’s name in the list of companies that had not complied with the minimum 25% public shareholding norm. SEBI took more than 2 months to give time for hearing then pass order ( talk of height of ridiculousness of it but that’s the nature of the beast)
Total time taken for liquid trade in shares allotted post amalgamation 1 year 2 1/2 months.
In-between I had a running duel with the co sec of Jyothy as to why it was taking them so long but that’s another story.
Tech Mahindra
1. Board meeting of Tech M for considering amalgamation 21st March 2012
2. Direction by Bombay High Court to convene meeting of
Shareholders 3rd May 2012
3. Court Convened Meeting(s) held 7th June 2012
4. Bombay H.C. approval for amalgamation 28th September 2012
5. Andhra High Court Approval 11th June 2013
6. Record date for determining eligibility for allotment
of shares 5th July 2013
7. Shares allotted 8th July 2013
Total Time taken 1 year 3 1/2 months.
Notice the speed displayed by the company in dates. This process took time due to Ramalinga Raju controlled entities filing objections in the Andhra High Court.
PVR-Cinemax
1. PVR Board approval 15th June 2013
2. Direction of High Court Not informed in the filing with BSE
3. Court convened meetings of
Shareholders and Creditors 7th December 2013
Notice the similarities between Jyothy and PVR. My take is that big law firms can help speed up the process in HC.
I reckon that barring unforseen circumstances this merger should get over and shares allotted latest by end of June 2014 which is about 7 months away.
Cinemax closed at 286 today and PVR at 577. With a swap ratio of 4:7 ( 4 shares of PVR for 7 shares of Cinemax ), the effective cost per share of PVR works out to Rs 500.5. This means a buyer of Cinemax at CMP should be able to realize a gain of about 15% ( not counting the transaction and demat costs ) in 7-8 months time. This assumes no further fall in PVR prices which is what the analysis will try to figure out. Watch this space.
Happy investing
Moneybloke 