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Jul, 03 2018

Lux board says yes to merger of promoter companies

Shares of Lux Industries which gained 27% so far this year ended flat at Rs 1,922.60 on Monday. The J M Hosiery owns men brand Genx and Ebell Fashions owns women brand Lyra.

The board of hosiery major Lux Industries has approved the merger of two promoter group companies — J M Hosiery and Ebell Fashions — with the company in a non-cash deal at a combined valuation of Rs 861 crore.

This deal, according to the company, will help minority shareholders to unlock value in the long-term. The deal will be ‘EPS accretive’ for the company, Udit Todi, senior VP of Lux Industries, told PTI.

The profits of three companies post-merger will be around Rs 79 crore for the year ended FY 2018 on revenue of Rs 1,142 crore.

Shares of Lux Industries which gained 27% so far this year ended flat at Rs 1,922.60 on Monday. The J M Hosiery owns men brand Genx and Ebell Fashions owns women brand Lyra.

As per the deal, the company will issue 48.43 lakh fresh shares of Lux Industries to the promoters at a valuation of Rs 1,779 each, which is the average of last two weeks prior to the June 26 board meet that approved the merger. The shareholding of promoters will increase to 78% after the deal from 73.8% now.

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