The shares of the Pantaloon Retail were seen trading higher by 4.4% at Rs 149 on BSE at 11.00 am IST. It touched intra-day high of Rs 151.
The board has fixed the share swap ratio at 1:5 which meant that for every five shares of Pantaloon, shareholders will get one share of Peter England.
Pantaloon Retail is led by Kishore Biyani. After the demerger, the holdings of Aditya Birla Novo will be 50.09%.
"The board of directors of Peter England Fashions and Retail Ltd (PEFRL), a wholly-owned subsidiary of Aditya Birla Nuvo Ltd, at its meeting held today (Sunday), approved the scheme of arrangement for the demerger of 'Pantaloons Format business into PEFRL," Aditya Birla group said in a statement.
Pantaloon Retail will also be transferring all undertakings, business, activities, operations and a debt of around Rs 1,600 crore to PEFRL. The date of transfer has been fixed at July 1, 2012, the company said in the statement.
The transaction is expected to be completed within six months, the company said in the statement.