First Pacific aborts plan to take over Cocoaland

PETALING JAYA: Confectionery manufacturer Cocoaland Holdings Bhd yesterday received word from Hong Kong-listed First Pacific Co Ltd that the latter will not go ahead with its takeover offer for the Malaysian company, sending its stock tumbling as much as 40 sen or 16.67%.
In a filing with Bursa Malaysia, Cocoaland said it received a letter dated July 19 from First Pacific withdrawing its intention to acquire all the business and undertaking of Cocoaland.
After completion of the due diligence exercise, First Pacific said it is of the view that the strategic fit offered by Cocoaland differs from what First Pacific had envisaged, explained Cocoaland.
"Accordingly, the proposal is aborted," it said.
First Pacific is involved in telecommunications, consumer food products, infrastructure and natural resources businesses.
Shares of Cocoaland were suspended from 9am to 10am yesterday pending the material announcement. The counter, after the resumption of trading, then fell to price levels before the take over offer was launched. It closed 37 sen or 15.42% lower to RM2.03 on some 2.66 million shares done.
Last June, Cocoaland received a take-over offer from Hong Kong-listed First Pacific to acquire the entire business for RM2.70 per share or RM463.32 million in cash.
This offer came just four days after Cocoaland had rejected an RM377.52 million takeover offer at RM2.20 per share from Navis Asia BII Management Company Ltd.
In that case the board of Cocoaland had deliberated on the proposed acquisition by Navis Asia VII and unanimously rejected the offer. The reason for the rejection was not disclosed.
Leverage Success is the largest shareholder of Cocoaland, with a 38.04% stake, while Fraser & Neave Holdings Bhd holds 27.19% equity interest.
For the first quarter ended March 31, 2015, Cocoaland's net profit jumped more than two fold to RM8.01 million compared with RM3.41 million in the previous corresponding period, supported by higher profit margin sales mix as well as higher gain on foreign exchange and lower impairment of receivable.