Crompton Greaves Consumer Electricals on October 30 announced 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.
Crompton Greaves Consumer Electricals had announced the merger plan with Butterfly Gandhimathi on March 25, almost a year after picking up a controlling stake in the Chennai-headquartered firm.
The public shareholders of Butterfly were set to receive 22 equity shares of Crompton for every five shares held by them in Butterfly, the companies had said in a statement to the media. As per the merger ratio, the Butterfly shareholders were staring at a 7 percent premium.
Also Read: Crompton-Butterfly merger: Cost synergies will not flow to bottom line immediately
Shares of Crompton Greaves Consumer Electricals closed at Rs 283.90 on the NSE on October 30, while Butterfly Gandhimathi ended the day at Rs 1,160.10.
Voting details
According to the details furnished by Crompton, the number of votes polled by Butterfly's non-institutional public investors was 17.12 lakh and, out of this, 16.62 lakh votes were against the merger. This translates to 97.04 percent against the merger.
The number of votes polled by institutional public investors was 11.59 lakh and of this, 4.30 lakh votes were against. This translates to 37.15 percent against the merger.
Overall, public investors polled 28.82 lakh votes with 20.93 lakh against the merger, which translates to 72.61 percent.
According to Sebi regulations, a scheme of arrangement shall be acted upon only if the votes cast by the public shareholders in favour of the proposal are more than the number of votes cast by the public shareholders against it.
Also Read: Festive season set to light up consumer durables; Crompton, Havells among top picks
'No significant change'
Crompton Greaves holds 75 percent in Butterfly Gandhimathi and is classified as a promoter entity. It was already consolidating Butterfly’s financials post its majority stake acquisition in 2022.
"This development will not have any significant change in our growth strategy," Crompton said in the exchange filing. "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."
The near-term focus for managements is on expanding Butterfly's presence in North and West India. More than 80 percent of its revenue comes from the South.
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