RMS Limited intends to acquire Escorts Investment Bank

RMS (Private) Limited, a construction company, has expressed its intention to acquire the majority stake of Escorts Investment Bank Limited (ESBL).

The development was shared by brokerage house Arif Habib Limited, which was appointed manager to the offer, in a notice to the Pakistan Stock Exchange (PSX) on Friday.

“On behalf of the acquirer, we are pleased to submit a Public Announcement of Intention to acquire up to 87.96% shares of Escorts Investment Bank Limited (the “Target Company”) by RMS (Private) Limited,” read the notice.

As per the PSX notice, the company intends to acquire 87.96% – 119.28 million shares – through an agreement, and another 6.02%, which translates into 8.16 million shares, through public offer.

This translates into a total potential acquisition of 93.98%.

“As per PSX regulations, if a company intends to acquire over 30% stake of a company, it needs to offer to acquire shares from minority shareholders as well, which translates roughly to half of the total free-float.”

RMS (private) Limited is a traditional construction company which is registered with Pakistan Engineering Council in Category C-A.

Escorts Investment Bank Limited, incorporated in Pakistan under the provisions of the repealed Companies Ordinance, 1984 (Now the Companies Act, 2017) on 15 May 1995, started its commercial operations on 16 October 1996.

ESBL is licensed to carry out investment finance services, as a Non-Banking Finance Company under Section 282-C of the Companies Ordinance, 1984 and Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003.

As per the notice to the bourse, total number of issued shares of ESBL stood at 135.6 million.

ESBL’s share price quoted one day before the public announcement of intention stood at Rs5.19 per share.

Meanwhile, the weighted average share price as quoted on the securities exchange during 28 days preceding the date of public announcement of intention stood at Rs4.66 per share.