| Gateway Distriparks Cluster: Cannonball Recommendation: Buy Price target: Rs250 Current market price: Rs178 |
GDL acquires control of Snowman
Gateway Distriparks Ltd (GDL) has acquired a 50.10% stake in Snowman Frozen Foods (Snowman) for Rs48.12 crore. This deal puts the enterprise value of the firm at about Rs104 crore. GDL will infuse fresh funds in Snowman by subscribing to 34,390,000 new equity shares of Snowman at a price of Rs10.50 per share. Further GDL will purchase 861,000 existing equity shares of Snowman at a price of Rs17.50 per share from Amalgam Foods. GDL is already sitting on a huge cash pile of Rs300-350 crore that it had raised from a global depository receipt issue earlier this year. Hence the funding of the latest acquisition will not be an issue.
ICI India
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs430
Current market price: Rs372
ICI India to divest its stake in Quest India
Key points
- ICI India has announced that it will sell its last subsidiary, Quest International India Ltd, which is in the flavour and fragrance business. This is a strategic move by the company to concentrate on its core businesses of paints and chemicals.
- At the current market price the stock trades at 20.4x its FY2007 estimated earnings. We maintain our Buy recommendation on the stock with a price target of Rs430 based on the sum-of-parts valuation method.
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