Chiau family triggers MGO of Chin Hin Group Property

This article first appeared in The Edge Financial Daily, on January 14, 2020.
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KUALA LUMPUR: Chin Hin Group Property Bhd’s (CHGP) non-independent and non-executive chairman Datuk Seri Chiau Beng Teik and his family have launched a mandatory general offer (MGO) for the rest of the shares they do not own in the company.

In a filing with Bursa Malaysia yesterday, the group said Divine Inventions Sdn Bhd — which is a subsidiary of PP Chin Hin Realty Sdn Bhd, a vehicle owned by Beng Teik, his wife Datin Seri Wong Mee Leng and their son and executive director Chiau Haw Choon — had acquired five million CHGP shares (representing a 1.69% stake in the company) in the open market yesterday at 30 sen apiece.

In addition, Beng Teik had acquired 13.36 million shares (4.51% stake) from Hextax Holdings Sdn Bhd and Ong Choo Meng at 30 sen per share.

Prior to these acquisitions, the Chiau family had a cumulative stake of 31.39% of CHGP shares and 26.75% of CHGP outstanding warrants.

As a result of yesterday’s acquisitions, the Chiau family now controls 37.59% of the group’s shares, thus triggering the MGO.

The MGO entails an offer of 30 sen per share for the remaining shares that the Chiau family does not currently own, and a 10 sen per share price for the warrants they do not hold.

The 30 sen offer price for CHGP shares represents a 4.15% discount to the group’s one-year volume-weighted average market price (VWAMP) of 31.3 sen.

Meanwhile, the 10 sen price for its warrants represents a 24.24% discount to CHGP’s VWAMP of 13.2 sen per warrant. The Chiau family intends to maintain CHGP’s listing on Bursa Malaysia.

However, it bears noting that non-independent and non-executive director Datuk Goh Boon Koon and his vehicle, Teoh Hai Hin, Teoh Huan Shim and Mohd Salleh Hashim — who collective control 24.49% of CHGP shares and 24.87% of the CHGP warrants — have irrevocably decided to not undertake the offer.

“The offeror and ultimate offerors confirm that they have sufficient resources to satisfy full acceptance of the offer by every holder and that every accepting holder will be paid in full in cash,” it said.

CHGP shares closed unchanged at 30 sen yesterday, giving the group a market  capitalisation of RM88.92 million.