New Delhi, January 26, 2019: Shares of Prabhat Dairy hit a 52-week low of Rs 78.15, declining 16 per cent from its previous close, and crashing 30 per cent from its intra-day high on the National Stock Exchange (NSE) after the company announced that global dairy major Lactalis will buy its milk business. The stock had rallied 20 per cent to Rs 111 on the NSE in early morning trade.
“The company has entered into definitive agreements with Tirumala Milk Products Private Limited, a wholly owned subsidiary of French dairy multinational Groupe Lactalis, for the sale of its dairy business for a consideration of Rs 1,700 crore,” Prabhat Dairy said in a statement on Monday after market hours.
The transaction involves the sale of the dairy business undertaking of Prabhat Dairy by way of slump sale on a going concern basis, along with the sale of 100 per cent shareholding in Sunfresh Agro Industries Private Limited (a step-down subsidiary of Prabhat Dairy) via a share purchase agreement, it added. The transaction is subject to mandatory approvals.
Prabhat Dairy said that it intends to share a substantial portion of the proceeds from the sale with shareholders after meeting its tax and transaction cost obligations according to business-standard.com.
After closing of the transaction Prabhat Dairy intends to further develop its cattle feed business in various parts of the country, as well as expand into allied businesses such as animal nutrition and animal genetics.
Prabhat Dairy made a stock market debut on September 21, 2015. It hit an all-time high of Rs 241 on January 24, 2018 in intra-day deal. The stock was trading 32 per cent below its issue price of Rs 115 per share.