KUALA LUMPUR, (July 21): After falling to a two month-low yesterday, shares of Cocoaland Bhd extended gains in morning trades today in contrast to a heavy selling, after news of Hong Kong-listed First Pacific Co Ltd having aborted its plan to take over the confectionery business.

At 11.58am, its shares rose modestly 8 sen or 3.94% to RM2.11, with 627,000 shares traded. Cocoaland shares rose as high as RM2.15 in morning trades.

Yesterday, the share price of Cocoaland fell after an announcement that it had received a letter from First Pacific saying it was withdrawing its intention to acquire Cocoaland after the completion of the due diligence exercise.

According to a filing with Bursa Malaysia yesterday, First Pacific had withdrawn its intention to acquire all the business and undertaking of Cocoaland due to a difference in the strategic fit offered by Cocoaland, from what First Pacific had envisaged.

To recap, First Pacific was the front runner to acquire the snacks and candy maker, after proposing on May 29 to acquire Cocoaland (fundamental: 2.8, valuation: 2.0) for RM463.32 million or RM2.70 per share.

Cocoaland had early rejected Navis Asia VII Management Co Ltd’s offer of RM2.20 per share.

In a filing with Bursa Malaysia dated June 2, Cocoaland said it received an indicative non-binding proposal dated from First Pacific, which detailed that the proposed takeover of all its assets and liabilities will be undertaken by a special purpose vehicle (SPV).

Leverage Success Sdn Bhd, Cocoaland's largest shareholder with a 38% stake, had intended to acquire a stake in the SPV.