Singapore-based Fordington proposes to buy 62.16% of Yokohama, pending due diligence

PETALING JAYA: Yokohama Industries Bhd's Singapore-based largest shareholder HSG Investments Pte Ltd has entered into a heads of agreement with Fordington Pte Ltd to dispose of its entire 62.16% stake in Yokohama for RM1.70 apiece to the latter, pending a due diligence on Yokohama.
The RM 1.70 purchase price represents a 42 sen or 32.81% premium against Yokohama's last trading price of RM1.28.
The deal will potentially trigger a mandatory takeover offer (MGO) for the remaining Yokohama shares of the group.
In a filing with the stock exchange, Yokohama said the acquisition of shares by Fordington is conditional upon the favourable outcome of a due diligence on the Yokohama and the negotiation and execution of a definitive agreement.
This, however may give rise to a potential obligation of Fordington to extend an MGO offer in accordance with Section 218(2) of the Capital Markets and Services Act, 2007 and Section 9(1), Part III of the Code.
The shareholders of Fordington are Marston International Ltd and Joyful Sky Ltd, with a 50% stake each.
Worth noting is that Yokohama shares had not been traded at RM1.70 over the past few years.
Yokohama is the manufacturer and distributor of automotive and motorcycle batteries.
The exclusivity of the agreement is until February 11, 2015, where involved parties shall not discuss, transact, negotiate or make offers to any third party.
Trading in Yokohama shares was suspended yesterday pending the material announcement. It closed at RM1.28 last Friday.