24 minutes
PETALING JAYA: Can-One Bhd is launching a mandatory general offer (MGO) for Kian Joo Factory Bhd for RM3.10 per share or RM912.15 million for shares it does not own in Kian Joo.
This comes after Can-One’s proposed acquisition of a 0.49% stake in Kian Joo from shareholder Tan Kim Seng for RM6.71 million or RM3.10 per share, raising its shareholding in Kian Joo to 33.39% from 32.9%.
The offer price represents a whopping 51.28% premium to Kian Joo’s five-day volume weighted average price of RM2.0492. It is also 52.7% higher than its closing price of RM2.03 on Tuesday prior to the share suspension. Can-One was last traded at RM1.93.
Can-One and Kian Joo are both involved in the can manufacturing business, mainly serving the food and beverage industry. Currently, Can-One, via CISB, holds 32.90% equity interest in Kian Joo.
Can-One said the corporate exercise is part of the group’s expansion strategy to consolidate the can manufacturing business under Kian Joo in a bid to grow its sales and customer base.
It will also create enhanced scale and synergies for the enlarged Can-One group through, among others, streamlined procure-ment from suppliers to negotiate for bulk discount and improved operational efficiencies, resulting from economies of scale and integration.
“The proposals will allow Can-One Group to increase its range of products, namely the manufacturing of two-piece aluminum cans business as well as the manufacturing of corrugated box packaging business undertaken by Kian Joo to meet its customers’ requirement of being a total service provider of cans and packaging products.
“With the larger combined asset base of the enlarged Can-One group, the group will also be able to gain better access to both debt and equity capital markets to fund its current and future business activities and expansion,” said Can One.
In a related development, the Securities Commission Malaysia (SC) has reprimanded Can-One director and major shareholder Yeoh Jin Hoe and parties acting in concert (PACs) – including Can-One International Sdn Bhd (CISB) – for failure to undertake a mandatory offer for the remaining shares in Kian Joo after their shareholdings triggered the 33% MGO threshold.
This is breach of Section 218(2) of the Capital Markets & Services Act, 2007 and Paragraph 9(1)(a) of the Take-Overs Code.
The SC imposed a penalty of RM455,000 to be settled within 14 days against Yeoh and PACs as well as a restriction on the aggregate number of voting rights that may be exercised by the PAC in Kian Joo to not more than 33%.
If the proposed corporate exercise for which consultation with the SC was held on Dec 21, 2017 is not carried out within six months from the date of the commission’s letter, the PACs are required to reduce their collective holdings in Kian Joo to 33% and below.
