There were no sellers of Westlife Development shares on the BSE today.

After the announcement that Hardcastle Restaurants Private Ltd, a master franchisee for Western and Southern India operations of McDonald’s restaurants, will be brought under Westlife Development Ltd, sellers of Westlife shares made a vanishing act today.

The counter witnessed just 5 shares being traded on the BSE till about 1.30 p.m. today compared to the two-week average trading volume of nearly 16,000 shares, the only exchange where the shares are listed.

While the buy orders were for 3,13,431 shares, there were no sellers.

However, data showed that five shares had been sold on the exchange and the last traded price was Rs 86.20.

Westlife Development Ltd had on Friday announced a scheme of arrangement for consolidation under which Hardcastle Restaurants, a master franchisee for Western & Southern India’s business of McDonald’s Restaurants, will become its direct subsidiary.

The B.L. Jatia group holds majority stake in Westlife.

Amit Jatia, Vice-Chairman of WDL, explaining the proposed consolidation, had said that it opened up options to “accelerate our growth plans for expanding McDonald’s restaurants in West and South India” and to invest in the growth of the McDonald’s franchisee Hardcastle Restaurants through Westlife Development.

Investors seem to have drawn a parallel between Hardcastle and another listed fast food restaurant chain Jubilant FoodWorks Ltd that runs the Domino’s Pizza restaurants in the country.

The shares of Jubilant FoodWorks are trading at about Rs 1,332 (Rs 10 face value) on the BSE and investors seem to expect that Westlife after consolidation with Hardcastle would benefit in the same way like Jubilant.

Jubilant had in 2011-12 reported operational income of Rs 1,017.54 crore and a net profit of Rs 105.64 crore. The stock is trading at a high PE of about 68.

Hardcastle Restaurants, with its limited geographical presence (it operates McDonald’s in West and South India) had a turnover of Rs 544.46 crore and a net profit of Rs 42.51 crore in 2011-12, as reported by Westlife while announcing the consolidation of the two companies on Friday.

(This article was published on December 10, 2012)
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