
Chennai-based Butterfly Gandhimathi Appliances' public shareholders have turned down the proposal of merging the company with Crompton Greaves Consumer, following which both the companies will continue to operate as independent firms. In an exchange filing on October 30, Crompton Greaves Consumer Electricals said that public shareholders of Butterfly Gandhimathi voted overwhelmingly against the merger between the two companies.
"While the approval to the scheme from majority in number representing three-fourths in value of the equity shareholders, including public shareholders, of Butterfly was obtained at the meeting, approval of majority of the public shareholders of the Butterfly was not received in favour of the scheme," Crompton said in an exchange filing.
In March this year, Crompton Greaves had disclosed its merger plan with Butterfly Gandhimathi. In 2022, the company had picked up a controlling stake in the Chennai-headquartered firm. At present, Crompton Greaves has a 75 per cent stake in Butterfly Gandhimathi. The merger was to accelerate the business and convergence of public shareholders of Butterfly at a parent level, it said at that time.
As per details shared by the company at that time, the public shareholders of Butterfly, as of the record date, were offered 22 equity shares of Crompton for every five shares held by them in Butterfly as a consideration for the merger. As per the merger ratio, the Butterfly shareholders could have got a 7 per cent premium. Despite this favourable offer, Butterfly's public shareholders voted against the merger.
Sharing the voting details, Crompton said that a major number of votes were cast against the merger. Non-institutional public investors of Butterfly cast 17.12 lakh votes, with 16.62 lakh votes against the merger, translating to 97.04 per cent against the merger plan.
Institutional public investors cast 11.59 lakh votes, with 4.30 lakh votes against, translating to 37.15 per cent against the merger. In total, public investors cast 28.82 lakh votes, with 20.93 lakh votes against the merger, amounting to 72.61 per cent opposition.
Crompton in its exchange filing said: "This development will not have any significant change in our growth strategy. The companies will continue to operate as separate entities and work towards fulfilling their mutual strengths while they grow the kitchen appliances category in order to achieve the growth potential of each of the companies, thereby creating value for all the stakeholders."
At 1.20 PM, shares of Crompton Greaves Consumer Electricals were trading at Rs 282.70, down by 0.09 per cent. While Butterfly Gandhimathi Appliances shares saw a sharp fall and were trading at Rs 1,096, down by 6.26 per cent.
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