The shares of Prime Focus hit the roof on Thursday to close 20 per cent higher at Rs 62 with huge volumes. Market players expect SEBI to revise the open offer price at fair value. Credit Suisse is the biggest beneficiary of Prime Focus share price trading at 61 per share – a 20 per cent jump in one day. Credit Suisse will fully recover the loan taken by Reliance Media Works due to the increase in the Prime Focus share price.
The Securities Appellate Tribunal (SAT) is likely to appoint an independent valuer to arrive at the fair value of Prime Focus shares. The fair value is considered to be Rs 115 per share – a whopping 260 per cent higher than the current open offer price of Rs 44 offered by the promoters. At a fair value of Rs 115, Prime Focus open offer size will increase to Rs 900 crore from the current size of only Rs 340 crore.
Fair valuation by an independent valuer appointed by SEBI will benefit thousands of small and retail shareholders of Prime Focus. Prime Focus shares have rallied over 40 per cent since the announcement of open offer recently. Shareholders of Prime Focus, including Reliance Media Works Financial Services Private Limited, which holds a significant equity stake in Prime Focus, had recently challenged the price of the open offer made by the promoters, the Namit Malhotra family.
The shareholders have filed an appeal before the SAT, challenging the very depressed offer price of Rs 44. They have also sought the appointment of an independent valuer by SEBI and a stay on the open offer till fair valuation of Prime Focus shares is obtained.
The open offer to the shareholders got triggered as Credit Suisse entered into an agreement with the Namit Malhotra family to sell the shares acquired upon invocation of pledge.