Five years on, K-Electric transaction still pending clearance of Islamabad’s absurd demands

On the face of it, it looks like a straightforward extension update for an acquisition transaction. On December 28, investment bank and brokerage house Arif Habib Ltd (AHL) informed the Pakistan Stock Exchange (PSX), that the Securities and Exchange Commission of Pakistan (SECP) had granted an extension of 90 days until March 27, 2021.

The deal in question? Shanghai Electric Power Company (SEP) wanted to buy 66.4% or 18,335,542,679 shares of Karachi’s power provider, K-Electric (KE). In this case, AHL was the manager of the offer. The public announcement of intention had been published on June 30, 2020, but it seemed that SEP still needed some time to mull over legal matters, terms and conditions, and price before it initiated the formal public announcement of offer, which would entail an acceptance. 

This would make sense, except the SEP and KE have been going back and forth over a hypothetical acquisition for the last five years. The charade looks something like this: an intention, an extension, a withdrawal, a fresh intention. Rinse, repeat. 

Ah, KE: always receiving public announcement of intention, never public announcement of offer. This sad saga is well-documented, and Profit has combed through each PSX announcement so you do not have to.