KUALA LUMPUR: CAB Cakaran Corp Bhd has entered into a heads of agreement (HoA) with several parties to acquire a 51% stake in Singapore-based Tong Huat Poultry Processing Factory Pte Ltd for S$7.5 million (RM19.2 million) as it plans to tap into the Singapore poultry industry.
The transaction will be satisfied via an issuance of 9.2 million CAB shares to the vendors at 90 sen each and a cash payment of S$4.3 million.
In a filing with Bursa Malaysia yesterday, CAB said the acquisition in Singapore “where it does not have a significant footprint is to expand its business geographically and improve its presence regionally”.
The HoA was signed with Yam Boon Yin, Toh Chye Lam, Toh Eng Chuan, Toh Eng Hai, Ang Yow Tee, Toh Chai Hock, Toh Chai Hoe, Too Siew Din and Toe Heng Choon.
“We wish to highlight that the purchase consideration for the proposed acquisition is indicative at this juncture and may be subject to adjustments depending on the outcome of the due diligence to be conducted on the target company,” it said.
CAB, via its subsidiaries, breeds and trades broiler chickens, poultry feeds and other farm consumables; and is involved in processing, exporting, wholesaling, distributing and marketing of frozen marine, meat and food products.
Tong Huat is principally an operator of poultry slaughter houses and supplier of slaughtered poultry.
CAB shares fell 3.74% to RM1.03 yesterday, giving it a market capitalisation of RM135.52 million.
This article first appeared in The Edge Financial Daily, on October 9, 2014.