Yesterday we saw one more instance of shareholder activism. The shareholders of Butterfly Gandhimati Appliances rejected the proposed merger between itself and Crompton Greaves Consumer Electricals, leaving the companies to continue operating independently. This does not really impact the business of either companies as CG Consumer holds 75% in Butterfly and is already classified as ‘promoter entity’.
The companies had announced their proposed merger on March 25, 2023, through a share swap arrangement, offering 22 Crompton Greaves shares for every five Butterfly shares.
A total of 28.82 lakh public investors voted regarding the proposal, with 20.93 lakh or 72.61% voting against the merger. Of this, non-institutional public investors of Butterfly cast 17.12 lakh votes of which 97.04% were against the merger and Institutional public investors cast 11.59 lakh votes, of which, 37.15% voted against the merger.
Following this development, Butterfly is up in the green, rising over 2% to an intraday high at Rs.1111 while CG Consumer is in the red but less than 1% at Rs.280.