Devyani, Sapphire Foods shares jump on nod for merger
What's the story
Shares of Devyani International and Sapphire Foods have jumped up to 7% today. The spike comes after the Bombay Stock Exchange (BSE) issued an observation letter with no adverse observations on their merger proposal. This green light allows both companies to take their plan to the National Company Law Tribunal (NCLT) for further action.
Market impact
Proposed merger to create a massive QSR player
The proposed merger between Devyani International and Sapphire Foods could create one of India's largest quick-service restaurant operators. The combined entity would include franchises of popular brands such as KFC and Pizza Hut. However, before the shareholders can vote on this scheme, the BSE has asked for full disclosure on several aspects related to the merger.
Disclosure requirements
BSE's observations on the merger
The BSE has asked for detailed disclosures on pre- and post-merger shareholding patterns, assets and liabilities to be transferred, pending litigation or regulatory proceedings, promoter reclassification plans. This also includes a proposed stake sale by Sapphire Foods Mauritius to Arctic International. The exchange clarified that its observations shouldn't be seen as an endorsement of the merger or guarantee of its financial viability.