SMC Aims to Delist Pak Suzuki from PSX

In a strategic move that could reshape the landscape of the automotive industry in Pakistan, Suzuki Motor Corporation (SMC) of Japan, the majority shareholder of Pak Suzuki Motor Company Limited (PSMC), has put forth a proposal to acquire the remaining 26.91% minority shares of the company. The offer, set at Rs 406 per share, is part of SMC’s ambitious plan to delist PSMC from the Pakistan Stock Exchange (PSX) and transition it into a wholly-owned subsidiary.

The announcement came through a notice issued by PSMC to the PSX on Monday, revealing that SMC has formally submitted an application to the Securities and Exchange Commission of Pakistan (SECP) seeking approval for the voluntary delisting of PSMC. The proposal outlines SMC’s intent to execute the share acquisition through a tender offer, adhering to the provisions of the Companies Act 2017 and the PSX Regulations.

As per the notice, SMC aims to purchase 22,145,760 ordinary shares, constituting 26.91% of the paid-up share capital of PSMC, from the minority shareholders at a minimum price of Rs 406 per share.

The proposed offer price of Rs 406 per share carries significant weight, representing a premium of 37.5% over the closing price of Rs 295.36 per share on November 30, 2023, the last trading day before the public disclosure of the offer. Furthermore, it demonstrates an even higher premium of 38.8% over the average closing price of Rs 292.54 per share for the preceding six months.

This move by SMC has sparked interest and speculation within the financial and business sectors. The acquisition of the remaining minority shares and the subsequent delisting of PSMC from the PSX would position Suzuki Motor Corporation as the sole proprietor of one of Pakistan’s prominent automotive entities.

The offer’s attractive premium over recent market prices suggests a proactive approach by SMC to ensure a smooth acquisition process and potentially gain greater control over PSMC’s operations. However, the proposal is subject to regulatory approvals from the Securities and Exchange Commission of Pakistan (SECP) and compliance with applicable legal frameworks.

If successful, this acquisition could mark a new chapter in the longstanding partnership between SMC and PSMC, potentially paving the way for streamlined decision-making processes and accelerated innovation within the Pakistani automotive industry. Market observers will be keenly watching for further developments and regulatory decisions that will shape the future trajectory of Pak Suzuki Motor Company Limited.