Sri Lanka Janashakthi Insurance confirms sale talks, buyback, after price surge
ECONOMYMEXT – Sri Lanka’s Janashalthi Insuranace Plc, has confirmed that it was in talks sell its general insurance unit after a surge in trading volume and price and said it plans to buyback shares after the sale.
Janashakthi said its board had authorised the sale of all shares of is fully owned unit Janashakthi General Insurance Plc to an undisclosed party.
"The terms of the sale are yet in the final stages of negotiation," the company said in a stock exchange filing.
"The Board of directors also wishes to state that that it has agreed in principle that Janashakthi Insurance Plc, will implement a substantial repurchase of its shares following the sale of Janashakthi General Insurance Limited.
"The final terms of the repurchase will be based on the terms of the sale of Janashakthi General Insurance Limited."
Janashakthi shares rose 1.20 rupees to 21.20 in mid-day trading Thursday. Earlier in the week the stock surged 30 percent, to 20 rupees, after some buyers got to know of the talks, brokers said.
Amid delayed disclosures, leaked information and so-called ‘insider dealing’ or speculative trading may help sellers realize a higher price than if no information was available, analysts say.
There is market speculation that the general insurance unit may be sold to foreign insurance firm operating in Sri Lanka. (Colmbo/Feb02/2018)