Butterfly Gandhimathi hits record high on open offer by Crompton Greaves

Shares of Butterfly Gandhimathi Appliances (Butterfly) hit a record high of Rs 1,419, up 2 per cent on the BSE in Wednesday’s intra-day trade, after Crompton Greaves Consumer Electricals (Crompton) made an open offer to acquire 26 per cent equity stake (4.65 million shares) of the company at Rs 1,433.90 per share. Post acquisition, Crompton will hold up to 55 per cent stake in the company.

The stock of Butterfly, which is engaged in household appliances business, surpassed its previous high of Rs 1,399.15 touched on February 11, 2022. In the past three months, it outperformed the market by zooming 60 per cent as compared to 2 per cent decline in the S&P BSE Sensex.

Meanwhile, shares of Crompton rallied 5 per cent to Rs 396.35 on the BSE in the intra-day trade. It had hit a 52-week high of Rs 512.05 on September 16, 2021. In comparison, the S&P BSE Sensex was up 0.46 per cent at 57,563 levels at 09:45 AM.

"Crompton has signed definitive agreements on February 22, 2022 with certain members of the promoter group of Butterfly to acquire upto 55 per cent stake at Rs 1,403.00 per equity share, aggregating upto Rs 1,379.68 crore, and certain Butterfly trademarks in allied and cognate classes from promoter group entities for a consideration of Rs 30.38 crore," Crompton said in an exchange filing.

The transaction will be subject to completion of customary closing conditions. The transaction is expected to be financed through a mix of internal accruals and debt, the company said.

The transaction will accelerate Crompton's long-term strategic goal of becoming a leading player in the small domestic appliances segment. Butterfly's complementary product portfolio, coupled with scale and channel synergies, will drive robust revenue growth and profitability, Crompton’s management said.

Butterfly's leading kitchen and small domestic appliances portfolio includes Mixer Grinders, Table Top Wet Grinders, Pressure Cookers, Stainless Steel Vacuum Flasks, LPG Stoves and Non-Stick Cookware.