A potentially explosive situation at Diesel and Motor Engineering Plc (Dimo) where the directors of the founding families of the company would have quit was averted when Hayleys agreed to sell its Dimo stock back to the company, shareholders were informed recently.
The June 30 circular by the company said the Pandithages, Algamas and Peiris’(children of the founding directors) exiting would have had a ‘significant impact on the company and on all agency relationships of the company,’ in relation to the close relationship this group shares with the principals of such agencies.
Dimo is the oldest Mercedes agent in Asia- it’s 69 years now - with some of the world's top brands such as Tata, Siemens, Michellin, Ostram Lighting, etc. The circular said some principals already intimated that if there was a change of hands of share ownership in Dimo, they would reassess the relationship with Dimo.
On June 11, Hayleys struck an agreement with Mr. A. Ranjith Pandithage, Chairman and CEO Dimo to divest more than three million Dimo shares to Mr. Pandithage or his nominees within the children of the founding directors at Rs 147.50 per share and the following day both companies informed the Colombo Stock Exchange of such a planned deal.
The circular said soon after Hayleys received several higher bids ‘from an interested party with a view of making a hostile takeover of control of the company.’ Subsequently Dimo agreed to buy the stock at the higher price of Rs 160, the highest bid (outside Dimo) that was received by Hayleys, it said. Industry sources said the Rs.160 offer was made by businessman Ishara Nanayakkara.